Markets Report - 09 May 2023

A daily breakdown of the markets for the 9th May 2023, provided to you by Sterlex.

🇪🇺💶European Central Bank (ECB) policymaker Peter Kazimir said on Tuesday, “based on current data, the ECB will have to keep raising interest rates for longer than anticipated.“ EUR/USD keeps the pessimism unchanged in the first half of the week and returns to the sub-1.1000 region on Tuesday on the back of the steady resumption of the risk aversion in the global markets. Jefferson and J Williams The move lower in the pair came despite hawkish comments from ECB Board members Kazimir and Kazaks, who suggested that the ECB might go higher for longer thanks to slower rate hikes and the bank’s hiking cycle might not be finished in July, respectively.

🇬🇧💷GBP/USD renews its intraday high near 1.2635 as it reverses the previous day’s corrective pullback from the multi-month top heading into Tuesday’s London open. Elsewhere, The Guardian reports upbeat Brexit news and allows the GBP/USD to remain firmer. However, fresh optimism surrounding the Bank of England’s (BoE) optimism, coupled with the US Dollar’s failure to defend the latest gains, recall the Pound Sterling buyers. The Cable pair buyers took a breather amid the UK holiday on Monday, which in turn portrayed the quote’s retreat from the highest levels since April 2022. “EU leaders have signalled their desire to reset relations with the UK, seven turbulent years on from the seismic Brexit vote.”. In doing so, the quote ignores recently printed downbeat prints of the UK Halifax House Prices for April, down to -0.3% versus 0.2% market forecasts and 0.8% previous readings.

🇺🇸 🏦The greenback, in terms of the USD Index (DXY), extends the optimism seen at the beginning of the week and revisits the 101.50 region on Tuesday. The index keeps the upbeat mood well in place in the first half of the week and hovers around the mid-101.00s ahead of the opening bell in the old continent on turnaround Tuesday. Williams (permanent voter, centrist). The dollar, in the meantime, appears somewhat firmer on the back of steady cautiousness ahead of the release of key US inflation figures on May 10, while US yields appear marginally on the defensive. In the docket, secondary tier data will see the NFIB Business Optimism Index and the IBD/TIPP Economic Optimism index as well as speeches by FOMC’s P Jefferson (permanent voter, centrist) and NY Fed J. In the meantime, the US Dollar seems to have found some support after a Federal Reserve’s report published late on Monday on the banking sector warned that lenders could reduce loans in response to rising concerns about slower growth, which could eventually underpin the idea that an economic slowdown could be in the offing.