Interesting news to consider before you trade

Analyse der Finanz- und Warenmärkte

Markets are in good spirits. Not the best data on the US labor market hinted to us that in the near future, the Fed will obviously not make changes to the policy of quantitative easing (QE). The markets were encouraged, and on Friday we saw a good jump in prices for the dollar index.

In theory, the growth of the consumer price index, the figures for which we will see on Wednesday, can provoke a debate about changing the Fed's monetary policy. Most analysts are betting that annual inflation will jump to 3.6% in April.

I believe that the general upward trend will continue this week. However, inflation risks continue to hang in the air. The weak labor market data was only a temporary phenomenon. Therefore, the main risk was, and still is, the risk of unwinding inflation.

  • Inflation, falling yields and the US dollar pushed gold up

The price of gold rose by 4.5% in April amid growing concerns over inflation and a weakening US dollar. Since the beginning of the year, gold is still down (minus 6% year to date).

Last week, gold managed to break through $1800 and move towards resistance at $1830. The decisive trigger for the breakdown of $1800 was the weak US labor market release for April. The dollar continues to lose in value, and this gives good support to the defensive assets.

Central bank rhetoric remains soft and the commitment to stimulus was reiterated at last week's meetings. However, investor outflows from the largest ETFs investing in precious metals continued, although at a slower pace.

  • Elon Musk crushed Dogecoin

The value of the Dogecoin cryptocurrency collapsed after the American entrepreneur Elon Musk mentioned it on the air of the comedy TV show Saturday Night Live (SNL) on NBC.

During the five-minute opening speech, the head of Tesla and SpaceX joked a lot and touched on several topics at once. At the end of his monologue, which sounded on the eve of Mother's Day, which is celebrated in the United States on the second Sunday in May, the entrepreneur brought his mother on stage.

"I can't wait for my gift. I hope it's not Dogecoin"? she turned to her son. "Actually, it is," Musk admitted.

Dogecoin, which had previously reacted favorably to Musk's tweet mentions, plummeted afterwards in value. According to CoinDesk, within an hour after the start of the TV show, its value dropped from $0.66 to $0.50 apiece.

In early April, the cryptocurrency surged after Musk promised to "literally send Dogecoin to the moon". In February, its value almost doubled after Musk, returning to Twitter after a short lull, spoke in praise of it.

The wave of sales that swept the most meme cryptocurrency affected the rest of the altcoins.

  • Events of the week

In the middle of the week, data on UK GDP, the UK trade balance for March, data on euro zone industrial production for March, US consumer price inflation for April and the US monthly budget for April will be released.

The day will be very busy. Most likely, the foreign exchange market will be volatile on Wednesday, but the trend is still seen unchanged – strong markets and not too strong dollar.

Friday is also a very busy day in terms of statistics. We will see data on retail sales in the US, industrial production in the US, inventories in the US for March and consumer sentiment in the US. These US macro data have a direct impact not only on the yield of Treasury bonds, but also on the dollar, which, in turn, affects the commodity market.


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