Market Overview - Page 37

The US dollar faces increasing risks due to trade wars, credit rating downgrade, fiscal problems, and tariffs threats, leading to a decline in confidence and value.

Strong retail sector data and accelerating consumer inflation in Britain limit room for Bank of England rate cuts. This news boosts the pound, hitting 39-month highs, supported by strong retail sales figures exceeding expectations.

EURUSD is seeing a tactical retreat towards 1.13 after a rapid rise. The 1.12-1.15 area is a key pivot, with a longer-term uptrend targeting 1.20-1.25.

Eurozone PMI data showed a contraction in business activity, with services sector weakening while manufacturing improved. The strengthening euro did not hinder manufacturers.

UK inflation surged unexpectedly, raising concerns about a potential Bank of England rate cut. The rise was driven by increases in housing, household services, and leisure, challenging monetary policy.

Germany's DAX40 and UK's FTSE100 outperform S&P500, showing strength against economists' pessimism. Stimulus measures from Europe and China boost equities, with potential for positive impacts globally.

US markets were not afraid of the downgrade in the country's credit rating by Moody's, as investors quickly recovered from the 1.5% drawdown. Despite positive technical analysis, there are concerns about higher stock valuations and potential market corrections in the future.

Rumours are abundant about Trump demanding that Asia strengthen their currencies, while Europe braces for a trade war backlash.

US producer prices unexpectedly fell 0.5% in April, dampening expectations of a strong upward trend due to tariffs. Despite this, the market outlook for rate cuts decreased, leading to a 2.5% rise in the dollar over a month.

US CPI slowed to 2.3% y/y, slightly below expectations. Core inflation remains at 2.8%, leading to a weaker dollar and lower rate cut expectations.

German business sentiment improved in May, with the ZEW index rising significantly to 25.2. Current situation assessment remains low but the positive sentiment supports the EURUSD near its 50-day MA.

Oil prices have increased by over 12% due to positive news on China-US tariff talks. US oil production has declined, supporting an optimistic market sentiment and leading to falling commercial inventories.