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Futures News, May 6th: The ongoing tensions in the Middle East have led to fluctuating crude oil prices, while gasoline and diesel demand remains sluggish. News regarding fuel oil has limited directional guidance for market trading. From a supply and demand perspective, fuel oil supply has tightened slightly after major refineries scheduled for maintenance. Refineries have increased production to support prices, but fuel oil processing margins have been squeezed, causing both prices to decline. Downstream traders willingness to purchase at high prices has been dampened. Furthermore, under the guidance of supply guarantee policies, local refineries are operating relatively steadily, ensuring stable fuel oil supply and maintaining sales pressure. Considering all factors, the fuel oil market is experiencing mixed signals from both news and supply and demand perspectives. It is expected that fuel oil negotiations this week will see some areas remain stable or stagnant, while others will experience narrow fluctuations.On May 6th, the Ministry of Industry and Information Technology (MIIT) released the operating data of the electronic information manufacturing industry for the first quarter of 2026. In the first quarter of 2026, my countrys electronic information manufacturing industry experienced rapid production growth, continued export recovery, significant profit improvement, and accelerated investment growth, resulting in a generally positive industry development trend. In the first quarter, the electronic information manufacturing enterprises above designated size achieved operating revenue of 4.31 trillion yuan, a year-on-year increase of 14.8%; operating costs of 3.69 trillion yuan, a year-on-year increase of 11.7%; and total profits of 217 billion yuan, a year-on-year increase of 125%. In March, the operating revenue of the electronic information manufacturing enterprises above designated size reached 1.68 trillion yuan, a year-on-year increase of 15.7%.CEO of Rivian, the American electric vehicle company: Electric vehicle manufacturers are developing a more affordable derivative of the R2 model.Hong Kong-listed semiconductor and memory stocks surged, with Montage Technology (06809.HK) jumping over 18%, Tianshu Intelligent Manufacturing (09903.HK) rising over 13%, GigaDevice (03986.HK) gaining over 12%, OmniVision Technologies (00501.HK) and Hua Hong Semiconductor (01347.HK) both rising over 7%, and Solomon Semiconductor (02878.HK) and SMIC (00981.HK) both climbing over 6%.The Peoples Bank of China (PBOC) announced today that it conducted 26 billion yuan of 7-day reverse repurchase operations, with both the bid and winning bids amounting to 26 billion yuan. The operating rate was 1.40%, unchanged from the previous rate.

USD/CAD Extends Gains Following Fed Remarks on Aggressive Policy Tightening

Larissa Barlow

Apr 08, 2022 10:31

Tips 

  • The dollar gained strength versus a basket of major currencies.

  • Benchmark yields have retreated following a recent surge.

  • Gold and silver prices increased in response to inflation fears and the imposition of fresh sanctions on Russia.

  • Oil prices continue to decline as more reserves are released.

 

The dollar nearly reached a two-year high against a basket of currencies as the Federal Reserve made it clear that it intends to battle inflation forcefully through rate hikes. Benchmark yields decreased a few basis points today after the Federal Reserve announced its intention to continue tightening rates. The 10-year yield reaches its highest level since March 2019 of 2.67 percent as investors digest news of the Fed's policy tightening. Gold and silver prices increased as rising inflation fears fueled a surge in demand for safe-haven assets. This circumstance contradicts the Federal Reserve's recommendations on interest rate hikes. Oil prices fell as EIA member states announced plans to release additional strategic reserves. This is the largest release since the stockpile was established in 1980. Analysts disagree on the extent to which the release of supply will affect market tightness.

 

For the latest week, jobless claims decreased by 5,000 to 166,000. This figure, which is the lowest since 1968, indicates the extent to which the job market tightened last week. Dow Jones estimated the figure at 200,000. The figures indicate that the labor market has been experiencing a significant labor shortage. Increased demand for labor has resulted in rising wages and soaring inflation.

Technical Evaluation

The USD/CAD exchange rate continues to increase, staying near a two-week high of 1.258. The substantial increases come in the context of the Federal Reserve's aggressive policy stance and declining oil prices. New penalties against Russia, on the other hand, will bolster the Loonie and may limit gains. Reduced yields may act as a brake on the dollar's strength. In general, the Fed's tightening policy benefits USD bulls. Resistance is located near the 10-day moving average, which is now at 1.265. Near yesterday's lows near 1.243, support is seen. The short-term momentum shifted to the upside when the fast stochastic crossed above the buy signal.

 

Although the MACD line generated a crossover sell signal, the medium-term momentum is negative but favorable. When the MACD line (the 12-day moving average minus the 26-day moving average) passes the MACD signal line, this scenario occurs (the 9-day moving average of the MACD line).




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