Stocks cautiously climb higher ahead of data slump, Fed speakers

US Futures Contracts

  • Dow futures +0.5% to 33190
  • S&P futures +0.4% to 4150
  • Nasdaq futures +0.4% to 12695

In Europe

  • FTSE +0.35% to 7608
  • Dax +0.5% to 14458
  • Euro Stoxx +0.3% to 3800

Stocks climb, BoC decision later

US futures are pointing to a slightly higher start to trading on Wednesday, rebounding cautiously from the reopening of Shanghai and with inflation and the health of the US economy front and center.

Shares closed lower yesterday as fears of soaring inflation and slowing global growth dominated, albeit off session lows after confidence data of American consumers have exceeded expectations.

The Fed will launch its quantitative tightening program today, although the impact is not expected to be felt until June 15, when the bonds mature. It comes as Treasury Secretary Janet Yellen admitted she was wrong about inflation.

Looking ahead, many Fed speakers could provide deeper insight into what may come next in monetary policy. After Raphael Bostic said last week that the Fed could suspend the hike cycle after September, Christopher Waller was much more hawkish, saying outsized hikes could be implemented until inflation drops. .

Ahead of the Fed speakers, attention will be on US ISM manufacturing PMI data which is expected to show manufacturing activity rose at a slightly slower pace in May to 54.5, from 55.5, but is remained comfortably above the 50 level that separates expansion from contraction.

JOLTS data on job vacancies is also due and should show that vacancies in the United States remain at an all-time high, underlining the tightness of the job market.

The Bank of Canada is also expected to raise interest rates by 50 basis points today when it meets to discuss monetary policy.

In company news:

Salesforce is expected to jump 8% before market after the software company lifted its full-year earnings forecast and calmed market nerves by saying it saw no impact from uncertainty on the economic outlook further. wide.

Victoria’s Secret jumps 10% before market after beating earnings forecasts as its international business recovers from COVID

What future for the Dow Jones?

The Dow Jones extended its rebound from 30600 to the May 20 low, encountering resistance at the 50 sma and horizontal resistance at 33500. hope for a further rise. Buyers need to retake 33500 in order to extend upside towards 34000 round number. Support can be seen at 32775 May 17th high ahead of 32225 in February.

Forex Markets – USD Rises, EUR Falls

The USD is rising, following higher Treasury yields. Warmongering comments from the Fed and better-than-expected consumer confidence drove the bill higher. The focus now shifts to weaker data and numerous Fed speakers late in the day.

GBP/USD struggles to find a stronger base after UK manufacturing growth fell to a 16-month low in May. The manufacturing PMI was confirmed at 54.6, the preliminary reading.

EUR/USD is down, underperforming its peers after mixed data from the bloc. German retail sales unexpectedly fell -5.4% MoM in April, well down from -0.1% in March and the missing forecast of 0%. However, the manufacturing PMI was revised up for May to 54.6 from 54.5. However, it was still the slowest manufacturing growth since the start of 2021.

  • GBP/USD -0.54% to 1.2589
  • EUR/USD -0.7% to 1.07003

Oil rises Shanghai reopens

Oil prices are resuming their uptrend after falling in the previous session. Oil bulls are heading north following the ban on Russian oil from the EU and the end of the Shanghai lockdown.

EU leaders yesterday approved a 90% ban on Russian oil, which initially sent oil prices to a two-month high. However, speculation that OPEC+ could suspend Russia from the group and increase production then drove the price of oil down yesterday.

The OPEC+ meeting is tomorrow, and these concerns continue to limit oil price gains. In the meantime, oil bulls are digesting the idea of ​​tighter supply, with sanctions being phased in over a six-month period.

Meanwhile, and simultaneously, the demand outlook is improving as Shanghai reopens after 2 months of COVID lockdown restrictions

  • WTI Crude is trading +0.86% at $117.50
  • Brent is trading +0.67% at $119.03

Look forward

  • 14:45 US manufacturing PMI
  • 15:00 ISM US manufacturing PMI
  • 15:00 US JOLTS Jobs
  • 3:00 p.m. BoC Rate Decision
  • 15:30 EIA Crude Oil Inventories

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