by JustForex

Yesterday, the US dollar updated its two-week highs and strengthened against a basket of currency majors. The US dollar index (#DX) closed in the positive zone (+0.50%). The US currency supported the growth of government bonds yield amid comments by Fed officials who reduced the likelihood of a transition to negative interest rates. Investors and politicians are concerned about the second outbreak of coronavirus, cause after South Korea and Germany have eased restrictions, an increase in the number of new cases is observed. These events support the demand for “safe haven” currencies.

During the Asian trading session, weak economic data was published in China. Consumer price index (YoY) rose by 3.3% in April, while experts forecasted an increase by 3.7%. The producer price index fell by 3.1% in April instead of 2.6%. Meanwhile, the Bank of China has promised a “more powerful” policy to counter the economic consequences of the COVID-19 pandemic. However, in the quarterly report, the regulator did not provide detailed information on what measures would be taken.

The “black gold” prices have been increasing after the message from Saudi Arabia that they intend to deepen the reduction in production in June in order to cut the excess of oil in the world market. Futures for the WTI crude oil are currently testing the $24.75 mark per barrel. At 23:30 (GMT+03:00), API weekly crude oil stock will be published.

Market indicators

Yesterday, there was a variety of trends in the US stock market: #SPY (+0.02%), #DIA (-0.44%), #QQQ (+0.89%).

The 10-year US government bonds yield is consolidating. At the moment, the indicator is at the level of 0.70-0.71%.

• – US inflation data at 15:30 (GMT+03:00).

We also recommend paying attention to the speech by the FOMC members.

by JustForex