Global Economic Daily - 23/05/2024

NEWS AND MARKET COMMENTARY

Global Equities

• Dow Sheds 200 Points, FOMC Minutes Weigh on Stocks
• European Markets Close Lower as UK Inflation Misses Estimate

Global Fixed Income

• Treasury Yields Inch Higher as Fed Still Sees No Rate Cuts Soon
• Mass Panic as 10yr Yields Lose Almost 4bps

Currencies

• Dollar Higher Against Euro as Fed Minutes Support
• EUR/USD Forecast: Weakness Expected to Accelerate Below 1.0790

Energy

• EIA Warns Severe Hurricane Season Could Disrupt Oil & Gas
• Crude Testing the Low End of the Range

Metals

• Gold Price Forecast: Falls Further After Record High, Eyes Key Support Levels
• Silver Continues to See Volatility

Global Politics/News

• Federal Reserve Minutes Indicate Worries Over Lack of Progress on Inflation
• Russia Denies Wanting to Redraw Baltic Sea Border; Moscow’s Tactical Nuclear Weapons Drills Send a Warning to the West

Relevant Government Reports?

World Agriculture Supply and Demand Estimates (WASDE)

USDA Agency Reports

Producer Price Index (PPI)

Consumer Price Index (CPI)

U.S. Treasury Report

Fed Report

EIA Reports

EIA Summary?

Financial

Closing Commentary

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Quote of the Day: It’s easy to make a buck. It’s a lot tougher to make a difference. – Tom Brokaw

Equities: U.S. stocks traded lower Wednesday as the minutes from the Federal Reserve’s May meeting?raised concerns of persistent inflation, indicating the central bank may not cut interest rates soon. The?Dow Jones Industrial Average?declined 201.95 points closing at 39,671.04. It was the 30-stock index’s worst session in May. The?S&P 500?lost 14.40 points to end at 5,307.01, and the?Nasdaq 100?dropped 8.60 points to close at 18,705.20. Minutes from the April 30 to May 1?policy meeting of the Federal Open Market Committee released Wednesday stated a lack of progress in recent months toward lower inflation. The minutes also showed “various participants” discussed a willingness to hike rates if inflation did not keep moving lower toward its 2% goal. Investors will closely watch the report for clues on whether this year’s tech rally can continue. The tech-heavy Nasdaq Composite has jumped nearly 12% to record highs year to date. TECHNICAL OUTLOOK - The Dow and S&P are above the 14, 21 day moving average.

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Crude Oil: Oil prices fell more than 1% on Wednesday, retreating for a third straight day, as Fed officials rekindled worries about oil demand when they indicated interest rate cuts might be deferred due to sustained inflation. Also in the U.S., Energy Information Administration said crude stocks?rose?by 1.8 million barrels during the week ended May 17. Crude markets have been pressured by weakening fundamentals, such as falling spot Brent over futures and softer refinery margins. This will likely force OPEC to?extend?production cuts at its June meeting to support prices. Physical crude markets?have been weakening. In another sign that concern of tight prompt supply is easing, the premium of Brent's first-month contract over the second , known as backwardation, is close to its lowest since January. TECHNICAL OUTLOOK – The Crude is now below the 14, 21 day moving average.

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Metals: Gold and silver prices are sharply lower in midday U.S. trading Wednesday, on corrective pullbacks and profit taking following recent solid gains. Weak-handed longs in the gold and silver futures markets are also being forced to liquidate their recently established position. A Wall Street Journal report today said gold’s rally the past several months has been mostly due to buying buy central banks and especially China. The Journal said central banks of the world are starting to diversify more away from U.S. dollar-based assets that can be more easily sanctioned. The report said U.S. economic sanctions on Russia, following its invasion of Ukraine, that have helped to crimp Russia’s economy, were sort of a wake-up call for countries like China, which could also be sanctioned by the US. Technically, June gold futures bulls still have the solid overall near-term technical advantage. However, there is now the possibility of a bearish double-top reversal pattern forming on the daily bar chart. Bulls’ next upside price objective is to produce a close above solid resistance at the record high of $2,454.20. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,350.00. July silver futures bulls have the solid overall near-term technical advantage. Prices are in a steep, three-week-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $33.00. The next downside price objective for the bears is closing prices below solid support at $30.00. TECHNICAL OUTLOOK – Gold and silver are above the 14, 21 day moving average.?

DISCLAIMER: The Information and data contained herein was obtained from sources deemed reliable. The accuracy and completeness are not guaranteed

Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.

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