|Asset||Current Value||Weekly Change|
|WTI Crude Oil||49.87||-1.25%|
1. Will the Crypto-Crash last?
It’s been a long weekend for cryptocurrency traders, and for the first time in a while, the dominant trend was bearish. The major coins experienced several snapback rallies in the nervous, sometimes borderline panicky, environment. This morning’s healthy bounce could mean that we have seen the worst of the decline, but volatility is expected to remain elevated, with the next couple of sessions being crucial to the market. As the improving fundamentals and the lofty gains attracted more and more investors, and directed media attention to Bitcoin et al., the question is how new buyers will support the fragile market.
2. More New Highs Ahead for Two Faced US Market?
The major US indices recovered with a 7-day winning streak after the mini sell-off that pushed global stocks lower. European and Asian indices are lagging US equities, as the British election suddenly turned questionable, while the Manchester terror attack also weighed on sentiment. The surprise Chinese downgrade sparked a battle between sellers and the “Invisible Hand” of the Chinese leadership, as the negative announcement was followed by a pretty obvious intervention by the PBC. As fewer and fewer stocks participate in the US rally, a deeper correction is more and more likely, although the short-term momentum is still bullish.
3. What’s Next for Oil After the OPEC Meeting?
WTI Crude Oil, 4-Hour Chart Analysis
The OPEC meeting ended with the expected 9-month extension of the cartel’s production cut, and although there are signs that the crude oil market is slowly healing, the crucial commodity spiked lower after the announcement. Saudi Arabia also plans to curb imports to the US to limit global supply, as the country’s budget is severely hurt by the declining revenues. The long-term effects of the moves are questionable, as the rapidly improving cost-effectiveness of the US shale industry is actually being helped by them, and the “shale-cap” on prices is expected to fall even lower from the current $60 level.
4. Job’s Friday In Focus Before the Fed’s Next Meeting
US rate hike odds declined significantly last week despite the recovery in stocks, and the better than expected GDP growth number. The May employment report will be the last crucial release before the central bank’s next meeting, and although the consensus still points to a tightening move in June, the further schedule of the Fed is uncertain. A negative surprise could put pressure on the Dollar once again, especially Trump’s position remains vulnerable.
5. Gold at Make or Break Levels
Gold showed relative strength in the last couple of weeks, and it remained near its one-month highs, despite the rebound in US stocks, and the general stability in risk assets. The metal is trading between important support and resistance levels at $1260 and $1275 respectively. While the long-term trend looks to be finally turning higher, a decline below $1240 could lead to a test of the $1200 level.
Gold Futures, 4-Hour Chart Analysis
Key Economic Releases of the Week
|Tuesday||GERMANY||IFO Business Climate||114.6||113.1||112.9|
|Tuesday||US||New Home Sales||569,000||611,000||621,000|
|Wednesday||EUROZONE||ECB Prsident Draghi Speaks||–||–||–|
|Wednesday||CANADA||BOC Rate Decision||0.50%||0.50%||0.50%|
|Wednesday||US||Existing Home Sales||5.57 mill||5.60 mill||5.70 mill|
|Wednesday||US||Crude Oil Inventories||-4.4 mill||-2.4 mill||-1.8 mill|
|Thursday||US||Initial Jobless Claims||234,000||236,000||236,000|
|Friday||JAPAN||National Core CPI||0.30%||0.40%||0.20%|
|Friday||US||Core Durable Orders||-0.40%||0.40%||0.00%|
|Friday||US||UOM Consumer Sentimnet||97.6||97.6||97.7|
Key Economic Releases of Next Week
|Monday||EUROZONE||ECB President Draghi Speaks||–||–|
|Tuesday||GERMANY||Prelim CPI Index||-0.10%||0.00%|
|Tuesday||CANADA||Current Account||-11.4 bill||-10.7 bill|
|Tuesday||US||CB Consumer Confidence||120.1||120.3|
|Wednesday||US||Pending Home Sales||0.70%||-0.80%|
|Thursday||US||ADP Employment Growth||181,000||177,000|
|Thursday||US||Initial Jobless Claims||239,000||234,000|
|Thursday||US||ISM Manufacturing PMI||54.7||54.8|
|Thursday||US||Crude Oil Inventories||–||-4.4 mill|
|Friday||CANADA||Trade Balance||0.0 bill||-0.1 bill|
|Friday||US||Trade Balance||-45.5 bill||-43.7 bill|