Market Update – May 4 – Renewed Anxiety

May 4, 2023

Asian stock markets traded mixed, US futures are moving higher, while European futures are in the red. A somewhat mixed picture then, as markets digest the Fed announcement, while keeping a wary eye on financial conditions. A 25 bp hike had long been priced in, while the shift in the policy statement was also in line with expectations. The Fed kept all options open for the next meeting and the ECB is likely to do the same after delivering another hike today. Heightened caution at central banks also reflects the fact that bank jitters continue to linger and are contributing to a tightening of credit conditions that will amplify the rate hikes already delivered. Treasuries are in the green.

FX – USDIndex remained under pressure and dropped to 100.78 while the Yen continues to outperform, with USDJPY at 134.14. EURUSD failed to break 1.11, while Cable breached its 1.2592 high.
Stocks – The US500 lost -0.70%, the US30 is down by -0.80% and US100 declined –0.46%. The CSI300 corrected on its return from the extended holiday, the ASX also closed slightly lower, while the Nikkei was up 0.1% at the close and the Hang Seng is 0.8% higher on the day.

Commodities – USOil at $63.90 on signs of weak US demand and signals that the US may pause its interest rate increases. The lowest in more than 6-weeks on concerns over the global growth outlook.
Gold – Spiked to 1-year high at $2079. Currently presents some correction to $2033.

Biggest FX Mover @ (06:30 GMT) GER40 (-0.87%) drifted to key support level at 15,760. MAs bearishly crossed but MACD histogram & signal line are close to 0, Stochastics is slipping & RSI is at 37. ATR(H1) at 53.7, ATR(D) at 160.

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Andria Pichidi

Market Analyst

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