What you should know on Tuesday, May 10:
Risk aversion gripped financial markets earlier in the week. Global stocks fell while government bond yields soared during European trading hours, giving up some ground before the close on Wall Street.
The gloomy mood came from the usual suspects. High levels of inflation, rising coronavirus cases and tensions in Eastern Europe contributed to the race to safety.
The US dollar ended the day mixed but generally stronger. The worst performers were commodity-linked currencies as gold and oil prices fell sharply. AUD/USD fell to a new multi-year low of 0.6974, while USD/CAD approaches 1.3000, trading at levels last seen in December 2020. Spot gold, meanwhile, is trading around $1,854 a troy ounce, while WTI stood at $102.70 a barrel.
The EUR/USD pair fell to 1.0494 but managed to trim losses, ending the day with modest gains at the 1.0560 price zone.
GBP/USD is unchanged at 1.2340. Bank of England External Monetary Policy Committee member Michael Saunders said a neutral rate could be in the range of 1.25%-2.5%, adding that UK rates may need to break above neutral if expectations of inflation increase.
In the US, Fed Raphael Bostic said a 75bp rate hike is unlikely, but added that it doesn’t take anything off the table. Still, he said he sees two or three 50bp rate hikes as a baseline.
On the other hand, the president of the European Commission, Ursula von der Leyen, pointed out that they continue to advance in the Russian oil embargo, but that they still need to secure energy resources for the region.
Source: Fx Street
With 6 years of experience, I bring to the table captivating and informative writing in the world news category. My expertise covers a range of industries, including tourism, technology, forex and stocks. From brief social media posts to in-depth articles, I am dedicated to creating compelling content for various platforms.
