Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
MONDAY, MAY 09 2022
Markets opened with a risk-off sentiment on Monday as global Central Banks continue to battle rising inflation. The US dollar index extended gains for the 6th week in a row post-Fed rate hike and strong US Job report on Friday. The April Jobs report reinforced bets on Fed’s further hawkish tightening at the next policy meeting. Traders should pay attention to the line-up of Central bank members’ speeches including FOMC member Bostic, BoE MPC member Saunders and German Buba Beerman later in the New York session.
Gold extended its slide as US 10-year treasury Yields climb towards a 5-year high at 3. The yellow metal was trading at 1875 early Monday morning and could trade lower as interest-paying assets become more attractive.
The US has imposed a new sanctions package on Russia including accounting services. These sanctions will see new export controls on consumer goods and visa restrictions on Russian businesses. The G7 leaders have planned a ban on Russian oil due to the war in Ukraine and rising geopolitical tensions as Russia continues to retaliate. Major volatility will be experienced in the oil markets as the week begins.
The GBPJPY outlook is currently bearish as risk aversion renews demand for the Japanese Yen. The tightening lockdown in Shanghai continues to raise global economic growth concerns as commodities demand slows. The Bollinger bands (20) show a bearish breakout and the GBPJPY may target 159.58, 6-week support. The pair has a head and shoulder pattern as indicated by the grey rectangles and a break below the 159.58 support will reinforce the bearish outlook in the near term.