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Futures News, April 29th - According to foreign media reports, London Metal Exchange (LME) copper futures fell for the fourth consecutive day on Tuesday, hitting a two-week low, mainly due to a stronger US dollar, continued Middle East conflict boosting oil prices, and raising concerns about inflation and global economic growth. With the Iraq War now in its ninth week and no sign of a peaceful resolution in sight, the industrial metals sector continues to be affected by concerns about economic growth and demand stemming from the Middle East crisis. ING strategists stated that the conflicting parties appear to remain in a stalemate, and the supply of oil and other goods through the Strait of Hormuz remains severely restricted. This uncertainty puts pressure on the demand outlook for copper, which is dependent on economic growth. The market is focused on comments from central bank policymakers regarding inflationary pressures, with the Federal Reserve expected to maintain interest rates unchanged.According to foreign media reports on April 29th, American drivers are feeling an increasingly heavy "pain of refueling." Data from the American Automobile Association (AAA) on Tuesday (28th) shows that the average price of regular gasoline across the United States has risen to its highest level in nearly four years. Since the US-Israel attacks on Iran at the end of February, gasoline prices have risen by more than 40%. Data shows that the average price of gasoline across the US on Tuesday was close to $4.18 per gallon, up 11 cents so far this month; and up $1.19 per gallon since the end of February. More worryingly, there is still room for further price increases—last week, Brent crude futures rose by about 16% and US WTI crude rose by nearly 13% as diplomatic efforts to end the war with Iran stalled and supply concerns intensified. GasBuddy analysts pointed out that refinery maintenance and scheduled upkeep in the Great Lakes region will keep consumers in the region facing persistently high gasoline prices.The UKs National Institute of Economic and Social Research (NIESR) has lowered its 2026 UK economic growth forecast from 1.4% to 0.9% based on a moderate scenario.The UKs National Institute of Economic and Social Research (NIESR) predicts that, under a moderate scenario, the Bank of Englands interest rate will be raised to 4%.The UKs National Institute of Economic and Social Research predicts that the UK economy will grow by only 0.5% under an "unfavorable" Middle East scenario.

AUD/USD falls approaching 0.7200 despite the former RBA governor's aggressive forecasts

Alina Haynes

Jun 08, 2022 11:59

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Bears and buyers continue to fight for position around 0.7220-25 as sentiment is mixed and investors remain cautious ahead of the week's big data/events. In doing so, the Australian duo struggles to defend the hawkish remarks of former Reserve Bank of Australia (RBA) Governor Ian Macfarlane.

 

Ex-RBA Governor Macfarlane warned early Wednesday morning about chronically rising inflation and the need to drastically increase interest rates. The former policymaker also stated, "There is sufficient scarcity in Australia and the United States to maintain a high inflation rate."

 

In contrast, China's Vice Commerce Minister Wang Shouwen joined China's Vice Finance Minister Zou Jiayi in reiterating concerns about a global economic downturn and a decline in demand. Recent consensus among policymakers held that the rise of global demand is slowing.

 

It's worth noting that a rebound in US Treasury rates and apprehension ahead of Thursday's European Central Bank (ECB) meeting, as well as Friday's US Consumer Price Index (CPI) for May, tend to stifle the AUD/USD pair's movements.

 

In spite of this, 10-year US Treasury note rates jump two basis points (bps) to 2.99 percent the day after breaking a six-day downward trend. A record decline in the US trade deficit and optimism on the US budget appear to have prompted a recall of US Treasury bond sellers. The US trade deficit for April decreased 19.1 percent from the previous day to USD87.1 billion.

 

Other market optimists were defended by US Treasury Secretary Janet Yellen and optimism for a quicker economic rebound in China. Tuesday, US Treasury Secretary Yellen spoke before the Senate Finance Committee about the Fiscal Year 2023 Budget while stating that the US economy faced problems from "unsustainable levels of inflation" and supply chain disruptions. The official said, "An adequate budget is necessary to support the Fed's efforts to control inflation without damaging the labor market."

 

It should be noted that World Bank (WB) President David Malpass's warning that faster-than-anticipated tightening might force certain nations into a debt crisis akin to that of the 1980s appears to have impacted on the quotation as of late. The risk-negative news from Ukraine may follow a similar trajectory. Politico reported that Ukraine has not yet achieved a deal with Russia or Turkey to enable the safe passage of its grain ships in the Black Sea, casting doubt on a U.N. initiative to build a crucial food corridor.

Technical Evaluation

A two-week-old support line protects AUD/USD buyers at 0.7205. However, the 200-day moving average and the recent top, located around 0.7255 and 0.7285, may challenge the Aussie pair's upside before the bulls regain control.


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