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MTrading Team • 2023-05-01

Crude oil drops back below $80.00 as crucial week begins on a negative note

Crude oil drops back below $80.00 as crucial week begins on a negative note

Global markets turn dicey as holidays in multiple markets join a cautious mood ahead of the top-tier central bank events and the US/Canada jobs report. Adding strength to the downbeat sentiment could be the fears surrounding First Republic Bank.

With this, the recently upbeat US inflation clues allowed the US Dollar to cheer its haven status and weigh on the prices of Commodities and Antipodeans. It’s worth noting that the positives for New Zealand and the AUDUSD’s consolidation for dovish RBA allowed NZDUSD and AUDUSD to remain firmer.

USDJPY leads the G10 currency pairs by stretching the BoJ-led rally to a two-month high amid mixed sentiment.

That said, Oil prices dropped as a firmer US Dollar joined recession woes. On the same line, the Gold price also dropped even as the key Treasury bond yields and US stock futures remain sluggish.

EURUSD and GBPUSD remain pressured amid holidays in Europe and the UK while cryptocurrencies extend the previous day’s loss on fears of more withdrawal amid banking and recession concerns.

Following are the latest moves of the key assets:

  • Brent oil prints the first daily loss in three, mildly offered near $79.80 at the latest.
  • Gold price drops to $1,980, falling nearly half a percent by the press time.
  • USD Index rises for the third consecutive day as DXY bulls approach 102.00.
  • Wall Street closed with gains but couldn’t propel the Asia-Pacific shares. That said, holidays in Europe and the UK limit market moves elsewhere.
  • BTCUSD and ETHUSD grind lower around $28,500 and $1,850 as we write.
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Downbeat start to the key week

Having witnessed a positive weekly performance of the US stocks, traders begin the key week comprising multiple central bank events and the front-line data on a red line as the US FDIC called bids to acquire the troubled First Republic bank, in which JPM seems to succeed.

Also weighing on the market mood could be the downbeat prints of China’s official PMIs and fears of higher for longer rates by the top tier central banks. 

However, holidays in many key markets join a light calendar to restrict the move during early Monday. The same allows the US Dollar to remain firmer despite dicey bond coupons.

Elsewhere, cryptocurrency bulls are retreating in the last few days amid fears of more profit-booking at the higher levels due to the likely hawkish FOMC and upbeat US data. 

  • Strong buy: USDJPY
  • Strong sell: ETHUSD, GBPUSD
  • Buy: USD Index, USDCAD, Nasdaq, EURUSD
  • Sell: DAX, FTSE 100, gold, BTCUSD, AUDUSD

US ISM Manufacturing PMI, Canada activity data to entertain traders

Although most markets are closed and the recent verdict on First Republic Bank may ease the risk-off mood and allow the traders to consolidate the early-day moves, April’s activity data for the US and Canada may entertain traders. Should the scheduled data print upbeat figures, the latest US Dollar run-up can extend. It’s worth noting, however, that the risk catalysts will be more important for clear directions.

May the trading luck be with you!