30/04/2024 - 07:53 UTCThe dollar posted a moderate decline against most majors on Monday, with the dollar index (USDX) ending the session 0.3% lower. The long-awaited March FOMC meeting is now in focus for dollar traders with traders largely biased towards unchanged interest rates and a hawkish outlook that could further support the value of the dollar.
According to the CME Fedwatch tool, bets for a rate cut in June are currently at 11.3% while July and September stand at 27.3% and 45.4% respectively.
In other news, the yen lost more than 1% of its value against the dollar on Monday, amid mixed Japanese economic reports which added further pressure to the Japanese currency. While industrial production rose more than expected in March, retail sales missed expectations by a wide margin, presenting a weak outlook for consumer spending and inflation.
Oil prices declined on Monday, with the two main benchmarks WTI and Brent losing 0.75% and 0.30% of their values respectively as talks of ceasefire talks between Israel and Hamas are in development. According to reports, Israel had offered a 40-day ceasefire offer to Hamas, as delegates from the two met in Egypt for renewed talks. The Hamas delegation left Cairo and will return with a written response to the proposal.
The three main stock market indices ended Monday almost unchanged as investors remain on the sidelines anticipating US inflation data due later in the day and the outcome of the Fed’s two-day monetary policy meeting tomorrow. In corporate news, Tesla (TSLA) stock soared 15% after the EV giant reportedly received tentative approval from Beijing to launch its driver assistance software in China.
Some price action could be observed later today, upon the release of US inflation and consumer confidence data, the Chicago PMI report and GDP reports from Canada and the eurozone.
The EUR/USD pair ended the first session of the week with moderate gains ending the session above the level of 1.0710. Market participants broadly expect US rates to hold steady this week, but traders will be looking for an uptick in Fed guidance for when rate cuts could be coming.
German Consumer Price Index (CPI) inflation rose to 0.5% MoM in April, up from the previous month’s 0.4% but missing the forecast 0.6%. Germany’s YoY Harmonized Index of Consumer Prices (HICP) inflation ticked higher to 2.4%, compared to the forecast hold at 2.3%.
European Gross Domestic Product (GDP) figures are due later today. The key headlines this week will be the Fed’s latest rate call on Wednesday, followed by Friday’s NFP labor data.
Gold prices fell on Monday, remaining pinned below recent peaks as fears of higher-for-longer U.S. interest rates grew before a Federal Reserve meeting this week.
Waning safe haven demand also weighed, especially as recent reports showed renewed ceasefire talks between Israel and Hamas.
But despite recent declines, gold prices were still trading up over 3% for April, extending stellar gains seen in March.
Focus was now squarely on a Fed meeting later this week, where the central bank is widely expected to keep rates steady. But Fed Chair Jerome Powell is expected to offer a more hawkish outlook on rates, especially following a series of hot inflation readings.
Oil prices fell Monday, as fresh peace talks between Israel and militant group Hamas in Cairo cooled bets of a wider conflict in the Middle East disrupting supplies.
In a sign of fresh hope for a temporary truce in the Gaza war, an Israel delegation is reportedly expected in Cairo later today just as Hamas weighs up Tel Aviv's latest deal that includes the exchange of hostages for a broader ceasefire.
Ukraine attacked more Russian oil refineries over the weekend, while also calling on more military aid from the U.S. over worsening conditions on the front lines. Attacks on Russian refineries factored into bets on tighter supplies, especially as Russia announced more production and export cuts earlier this year.
U.S. stocks ended higher on Monday, with sharp gains for Tesla and Apple leading the way, as investors looked toward what the Federal Reserve would say about the interest rate outlook after its policy meeting this week. Tesla shares surged 15.3%, after the electric vehicle maker made progress in securing regulatory approval to launch its advanced driver-assistance program in China, its second-largest market after the U.S.
The first-quarter earnings season is set to continue today with a string of key consumer earnings on tap. Amazon.com Inc, Coca-Cola Co, Starbucks Corporation, and Mondelez International Inc are set to report earnings, as are Eli Lilly and Company and Advanced Micro Devices Inc. Earnings from 3M Company and PayPal Holdings Inc are also due later today.
The materials contained on this document should not in any way be construed, either explicitly or implicitly, directly or indirectly, as investment advice, recommendation or suggestion of an investment strategy with respect to a financial instrument, in any manner whatsoever. Any indication of past performance or simulated past performance included in this document is not a reliable indicator of future results. For the full disclaimer click here.
Join iFOREX to get an education package and start taking advantage of market opportunities.
A beginner's e-book
$5,000 practice demo account
A 12-part video course
English 
Arabic - العربيه
Chinese Simplified - 中文 (简体)
Chinese Traditional - 中文 (繁體)
English (India)
Japanese - 日本語
Kazakh - Қазақ
Korean - 한국어 (대한민국)
Russian - Русский
Spanish - Español
Thai - ไทย
By