Spreadex Market Update
CHF takes over as leading safe-haven
US Dollar tanks amidst rising growth concerns. CHF takes over as leading safe-haven currency. Equities better bid on Friday following a volatile week. Gold, silver and oil all higher on USD weakness.
Key Factors for Today
- USD closing out first losing week since late March
- Equities in the green following choppy week
- UK retail sales beat forecasts
- Metals and oil rally amidst USD weakness
Coming Up
- G7 meetings all day
- EUR consumer confidence
- AUD parliamentary elections
US Dollar Falls from Favour
The US Dollar has seen continued selling across late Asian and early European trading today. The greenback is currently on course to close out its first bearish week since the end of March.
This comes despite a slew of more hawkish commentary from key Fed members this week, including Fed chairman Powell. With Powell seeming to be introducing the idea of more aggressive action from the Fed, price action in USD suggests a focus on growth concerns in the US. Yesterday’s Philly Fed manufacturing index was seen cratering in April while weekly unemployment claims rose above forecasts.
Stronger Start for Equities on Friday
Equity markets are starting the European session with a much better tone on Friday. The ASX200 and the Nikkei have both been stronger overnight, feeding into a positive start today. Weakness in the Dollar is fuelling better demand in the FTSE and the DAX, with both indices in the green. In the US, the S&P and the Nasdaq are both higher also, benefitting from the correction in USD.
CHF Strength Continues
In FX, the Swiss Franc continues its recent run of strength today. CHF appears to have replaced USD and JPY as the safe-haven of choice. Given the massive devaluation in JPY and growth fears hitting the US, CHF is leading both currencies again on Friday. USD has been the weakest currency over late Asian and early European trading allowing for a broader recovery among key trading counterparts.
UK Retail Sales Smash Forecasts
UK retail sales today were seen coming in much stronger than expected last month. At 1.4% vs -0.3% expected, consumer activity was seen staging a firm rebound on the prior month’s -1.2%. Considering the cost of living crisis currently gripping the UK, this data makes a welcome surprise for GBP bulls and has seen GBP well bid across the European open.
Gold and Silver End the Week Higher
Precious metals are finally seeing better upside. Over the last 24 hours both gold and silver have staged a better recovery amidst broader USD weakness. Gold prices are now around 4% higher from the lows printed earlier in the week with silver prices almost double that. If USD weakness extends into next week this should set the stage for further strength in metals prices.
Oil Reverses Sharply Off Yesterday’s Lows
Oil prices are starting the European session in a much more subdued manner following the volatility we’ve seen over the last 24 hours. Crude reversed sharply off yesterday’s lows to end the session around 6% higher. However, the market is still down around 5% off the week’s highs as the prospect of an EU-wide ban on Russian oil becomes less likely.
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