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MTrading Team • 2023-05-18

Oil buyers struggle amid firmer US Dollar, market’s mixed mood

Oil buyers struggle amid firmer US Dollar, market’s mixed mood

Optimists take a breather early Thursday as markets reassess the odds of getting the US debt ceiling extended even as the US leaders sound hopeful of late. Also acting as a filter for the risk-on mood are fears of cooling US spending and hawkish Fed talks, especially amid recently firmer US data.

On the other hand, the Aussie jobs report disappointed and poured cold water on the face of RBA hawks while the NZ budget gains a few accolades despite pushing back the time for witnessing budget surplus.

With this, the US Dollar remains firmer despite sluggish yields and unimpressive market moves. The same weighs on the AUDUSD but fails to drown the Kiwi prices. That said, the GBPUSD and EURUSD also remain pressured but USDJPY struggles for clear directions.

That said, Oil price grind after rising the most in two weeks as traders scale back hopes of more demand from China and the US, mainly due to the bearish inventory details and expectations of additional supplies. Furthermore, Gold prices also print a three-day downtrend despite posting mild losses around a three-week low of late.

Cryptocurrencies mark mixed plays as ETHUSD prints mild gains but BTCUSD shows minor losses amid the market’s consolidation.

Following are the latest moves of the key assets:

  • Brent oil remains indecisive near $76.80-90 after rising the most in two weeks the previous day.
  • Gold price licks its wounds around $1,974, pressure to the three-week low at the latest.
  • USD Index grinds higher around six-week top, around 103.10 by the press time.
  • Wall Street closed with notable gains and favored the Asia-Pacific shares grind However, equities in Europe and the UK print remain mildly bid as we write.
  • BTCUSD and ETHUSD remain indecisive around $27,400 and $1,830 by the press time.
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Market’s optimism fades

US policymakers’ hopes of avoiding the difficult default and the recession woes in turn allowed the markets’ to remain optimistic during late Wednesday and early Thursday. Adding strength to the positive vibes were mixed US data and the absence of US Fed policymakers’ speeches, as well as a light calendar.

That said, the downbeat Australia jobs report pushes back the RBA haws while the NZ budget fails to propel the hawkish RBNZ odds, which in turn allows the AUD and NZD to remain sidelined, mostly mixed.

Further, Cable and Euro both bear the burden of recently easing tones of the BOE and ECB policymakers even as they support the higher for longer rates. Elsewhere, Oil price fails to extend the previous run-up as traders eye more demand push than the supply crunch.

On a different page, cryptocurrencies fail to gain strength and trade mixed as looming regulatory woes join the unimpressive industry news.

  • Strong buy: Gold
  • Strong sell: ETHUSD, GBPUSD
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD

Risk news is important amid fewer data

As a light calendar lies ahead, the forex and equities markets may witness lackluster moves but the bonds could cheer the rush for risk safety and prod the previously upbeat yields. That said, a speech from ECB’s Lagarde and BoE’s monetary policy hearings, as well as mid-tier US and Canada data, can entertain traders.

May the trading luck be with you!