Market Review by Solid ECN

SOLIDECN · Apr 11, 2022

EURUSD

The European currency shows flat dynamics of trading against the US dollar during the Asian session, consolidating near local highs from March 1 and the level of 1.1170. Activity on the instrument at the beginning of the week remains restrained, as investors expect new drivers to appear on the market. The day before, the single currency showed a fairly active growth, supported by weak data from the US, while European statistics had only a slight impact. Revised data from the United States showed GDP growth in Q4 2021 at 6.9%, which is 0.1% worse than previous estimates. The Gross Domestic Product Price Index for the same period also corrected from 7.2% to 7.1%. European data pointed to a further decline in business sentiment in the euro area, as well as a record increase in inflation in Germany. The Economic Sentiment Indicator in the eurozone fell from 113.9 to 108.5 points in March, while the market forecast was at 109 points. Business Climate Indicator in March fell from 1.79 to 1.67 points. Consumer Confidence Level remained at -18.7 points. Consumer inflation in Germany accelerated from 5.1% to 7.3% in March, setting a new record high and beating market forecasts of 6.3%.

GBPUSD

The British pound is losing ground against the US dollar during the morning session, again preparing to test 1.3100 for a breakdown. Expectations of an early conclusion of a peace agreement between Russia and Ukraine are noticeably declining as market participants state that there have been no significant changes after the negotiations, and fundamental contradictions still persist. The Russian Federation is reducing the number of its troops in one direction in order to strengthen it in another, and this, of course, does not lead to a ceasefire. Demand for risky assets is also falling as April approaches, when new rules for paying for Russian gas come into force. If the mechanisms for paying for "blue fuel" in rubles do not work or the EU countries take a principled position, this may negatively affect supplies. It should be noted that the UK's dependence on resources from Russia is significantly lower than, for example, Germany's. Today, investors are focused on the updated statistics on the dynamics of GDP in the UK for Q4 2021. According to current forecasts, the British economy will grow by 1% QoQ and 6.5% YoY.

AUDUSD

The Australian dollar is falling against the US currency during the Asian session, correcting after an uncertain rise on Tuesday and Wednesday. The instrument is testing the level of 0.7500 for a breakdown, reacting to the general deterioration in market sentiment. Hopes for a de-escalation of the conflict in Eastern Europe are gradually fading, as the rhetoric of the Russian and Ukrainian authorities does not share the initial optimism expressed by the participants in the negotiation process in Istanbul. Meanwhile, the risks of possible interruptions in Russian energy supplies to Europe and a number of other countries are growing, since Russian President Vladimir Putin earlier ordered to switch to gas payments in rubles. Weak macroeconomic statistics from China exerts pressure on the AUD positions today. Non-Manufacturing PMI in March showed a sharp decline from 51.6 to 48.4 points, while analysts expected a further increase in the indicator to 53.2 points. NBS Manufacturing PMI for the same period fell from 50.2 to 49.5 points, which also turned out to be worse than market forecasts at 49.9 points.

USDJPY

The US dollar shows a fairly active growth against the Japanese yen during trading in Asia, recovering from a two-day "bearish" rally, which led to the renewal of local lows from March 25. Demand for the US currency is gradually recovering as expectations decline for a peace deal between Russia and Ukraine that would bring about a final ceasefire. However, buyers are cautious ahead of the publication of a large block of US macroeconomic statistics at the end of the week. The focus is on the Friday's report on the labor market for March, which will re-evaluate the prospects for an earlier tightening of monetary policy by the US Federal Reserve during the May meeting. Earlier, the Chair of the regulator, Jerome Powell, did not rule out the possibility of raising the rate by 50 basis points at once in response to the continuing growth of inflationary pressure. Macroeconomic statistics from Japan published today does not have a significant impact on the dynamics of the instrument. Industrial Production in the country rose by 0.1% in February, which is noticeably better than the 0.8% decline a month earlier, but falls far short of market expectations at 0.5%. In annual terms, Production added 0.2% after falling 0.5% in January.

XAUUSD

Gold prices are slightly declining during the morning session, correcting after rising the day before, which was triggered by the return of negative market sentiment. On Tuesday, gold updated the local lows of February 25, reacting to the optimistic statements of the participants in the negotiation process between Russia and Ukraine after the meeting in Istanbul. There was hope that military activity would noticeably decrease, and soon a ceasefire could be announced altogether. However, later it became clear that such conclusions were made somewhat prematurely. The Russian Federation announced the preservation of fundamental contradictions in the positions of the parties (first of all, on the territorial issue), and explained the reduction in the number of troops in two directions by the planned regrouping of the military contingent. Trading activity on the instrument remains low today. Investors are waiting for the emergence of new drivers in the market, and are also preparing for the publication of the March report on the US labor market on Friday.

SOLIDECN · Apr 11, 2022

The United States of America

USD is strengthening against JPY and has ambiguous dynamics against EUR and GBP.

Due to a lack of significant economic releases, investors focus on the monetary policy of the US Federal Reserve. The market is preparing for a sharper increase in interest rates and a significant reduction in the balance sheet, but investors fear that this will cause the US economy to slow down and even start a recession, as evidenced by the inversion of the yield curve of 10-year and 2-year bonds. However, several experts have come to the conclusion that this sign does not mean an immediate decline, and negative dynamics may begin to develop within a few years. Over the weekend, Cleveland Fed President Loretta Mester said she still believes the US Federal Reserve will be able to control inflation without causing serious damage to the economy.

Eurozone

EUR is strengthening against JPY and has ambiguous dynamics against USD and GBP.

Due to a lack of significant economic releases, investors are focused on the first round of the presidential elections in France, which was won by the incumbent head of state Emmanuel Macron but it was not as confident as experts expected. The gap between him and the far-right candidate Marine Le Pen was only 4%, reinforcing fears that she could take the presidency in the second round, and France would move away from common European economic standards and even abandon the euro. At present, analysts see the likelihood of Le Pen winning the election as very small, so the second Eurozone economy is unlikely to expect additional shocks.

The United Kingdom

GBP is strengthening against JPY and has ambiguous dynamics against EUR and USD.

Today in the UK, a large block of economic statistics was released. UK GDP grew by 0.1% MoM, falling short of forecasts of 0.3%, and slowed down from 9.5% to 10.5% YoY, more than experts expected, which may affect further actions of the Bank of England. The regulator may continue to tighten monetary policy but will do it more carefully. The volume of industrial production in the country also did not please investors: the indicator decreased by 0.6% MoM instead of the projected growth of 0.3% and decreased more than experts expected – from 3.0% to 1.6% YoY.

Japan

JPY is weakening against its main competitors – EUR, USD, and GBP.

Today, Bank of Japan officials lowered their estimates for most of the country's regional economies (the changes affected eight major regions) amid rising commodity prices and a possible correction in overall forecasts. Bank of Japan member Shinichi Uchida said the regulator would be supported by an ultra-loose monetary policy as the current rise in inflation was fueled by fuel spending and could hurt the country's fragile economic recovery. At the same time, the head of the department, Haruhiko Kuroda, warned of very high uncertainty amid the Ukrainian crisis.

Australia

AUD is moderately weakening against its main competitors – JPY, USD, EUR, and GBP.

Due to a lack of significant economic releases, investors focus on politics: on May 21, parliamentary elections will be held in Australia. The election campaign began today, and it cannot yet be stated that it has been successful for the current Prime Minister, Scott Morrison. According to polls, the Liberal Party, which he heads, could lose up to ten seats in parliament, but it is too early to talk about Morrison's resignation.

Oil

Oil quotes are correcting down today.

The coronavirus pandemic in China still exerted pressure on prices, which led to the blocking of a major financial and industrial center – Shanghai. Currently, China is the largest energy importer in the world, and the Shanghai area consumes 4% of all the “black gold” purchased by the country; and further tightening of lockdown measures could lead to a decrease in consumption. Investors are looking forward to bringing to market the 60M barrels promised by the International Energy Agency from government stockpiles of key consumers. Last week, the US oil rig count increased from 533 to 546 units, putting pressure on quotes.

SOLIDECN · Apr 12, 2022

EURUSD
The European currency shows flat dynamics of trading against the US dollar during today's Asian session, consolidating near the level of 1.0880. EUR/USD expects new drivers to appear on the market; however, current forecasts for the next macroeconomic publications are quite pessimistic. In particular, data on consumer inflation in Germany for March will be released today. The ZEW Research Institute will later release its traditional business sentiment report for April. Analysts project that inflation in Germany will rise by 2.5% MoM and 7.3% YoY, while the Harmonized Consumer Inflation Index could rise to 7.6%. ZEW Survey on Economic Sentiment in Germany in April may fall from -39.3 to -48 points. ZEW Survey on Current Situation is projected to fall from -21.4 to -35 points. Additional pressure on the positions of the single currency is exerted by the situation with a new package of sanctions against the Russian economy, as the EU authorities have not reached a consensus on the oil embargo.

GBPUSD
The British pound is traded with mixed dynamics against the US currency during the morning session, holding near 1.3020. Activity on the market at the beginning of the week remains quite low, despite the publication of a large block of macroeconomic statistics from the UK on Monday. Data released the day before reflected a slowdown in UK GDP growth from 0.8% in January to 0.1% in February. Analysts had expected the dynamics to slow down to 0.3%. The pace of Industrial Production in February recorded a decline of 0.6% after an increase of 0.7% a month earlier. The real dynamics again turned out to be significantly worse than analysts' forecasts of growth by 0.4%. In annual terms, production rates slowed down from 3.0% to 1.6%, while the market expected 1.4%. Additional pressure on the position of the pound today is exerted by statistics on retail sales in the UK. BRC Like-For-Like Retail Sales in March showed a decrease of 0.4% after increasing by 2.7% a month earlier.

AUDUSD
The Australian dollar is showing a weak corrective growth against the US dollar during the Asian session, recovering from a four-day "bearish" rally. The instrument is testing the level of 0.7420 for a breakout, retreating from its local lows of March 22. The situation on the markets is changing slightly, and traders still do not show any noticeable interest in risky assets. The US dollar is also in demand amid growing expectations of a sharp tightening of the US Federal Reserve's monetary policy already during the May meeting. In addition, it is expected that in May the regulator will announce the start of a quantitative tightening program in order to reduce its balance sheet. In turn, the Australian dollar was supported at the beginning of the week by optimistic macroeconomic statistics from China. The Consumer Price Index in China in annual terms in March accelerated from 0.9% to 1.5%, which was better than market expectations at 1.2%. On a monthly basis, however, inflation showed only zero dynamics after rising by 0.6% in February. Today's data support the buying mood for the instrument with strong statistics from Australia. National Australia Bank's Business Conditions in March strengthened from 9 to 18 points, while the Business Confidence index for the same period rose from 13 to 16 points, with a slowdown forecast to 8 points.

USDJPY
The US dollar is traded mixed against the Japanese yen during the Asian session, consolidating near 125.40. The day before, the US currency again showed active growth against the yen and updated the record highs of June 2015, receiving support from the previous growth factors. First of all, investors expect further tightening of the US Federal Reserve's monetary policy at a somewhat more active pace. Market participants are also counting on the launch of a quantitative tightening program. The US currency is supported by the general demand for safe assets in connection with the extremely tense situation around Ukraine, on the territory of which Russia continues to conduct a special military operation, despite the unprecedented sanctions pressure from Western countries. The day before, the EU authorities agreed on a new package of restrictions, which, among other things, provides for a ban on the import of Russian coal. The issue of the embargo on oil and natural gas is still open; however, real steps are also being taken to gradually abandon the purchase of these energy carriers from the Russian Federation. Today, the yen is slightly supported by the Japanese macroeconomic data. Thus, the volume of Bank Lending in the country in March increased by 0.5% after an increase of 0.4% a month earlier. Analysts expected the dynamics to slow down to 0.3%.

XAUUSD
XAUUSD shows moderate growth during Asian trading, testing the level of 1960.00 again. The day before, the instrument has already made attempts to consolidate above it, having updated local highs from March 14. Gold prices briefly rose to a monthly high on fears of increased inflationary risks in Europe and the United States, which was the reason for the purchase of the metal, but closer to the end of the Monday afternoon session, the "bulls" lost most of their gains. Tomorrow, investors are waiting for the publication of inflation data from the US. Despite a number of active measures taken by the US Federal Reserve to contain it, analysts expect the annual value to accelerate to 8.4% in March. The biggest contributor is likely to come from higher energy prices as commodity markets surged to new record highs due to the sanctions policy against the Russian economy. At the same time, further growth of gold is constrained by expectations of a 0.50% increase in interest rates by the US Federal Reserve already during the May meeting. In addition, representatives of the regulator spoke out in favor of launching a quantitative tightening program.

SOLIDECN · Apr 13, 2022

EURUSD
The European currency is showing insignificant growth against the US dollar during today's Asian session, recovering after moderate falling the day before. At the moment, EUR/USD is trading near 1.0840, not far from the local lows of March 7. The pressure on the positions of the single currency is exerted by the overall negative situation on the market, associated with a sharp slowdown in economic growth in the region with a simultaneous increase in inflation. The data released the day before confirmed the acceleration of inflation in Germany to 7.3%, while the outlook remains negative. The EU countries continue to impose new restrictions on the Russian economy, which so far only lead to a sharp increase in energy prices. The fifth package of sanctions, among other things providing for an embargo on the supply of coal and a number of other types of solid fuels from Russia, was agreed by the EU last week. However, the main fuel bans will come into effect only from August 2022. There is no embargo on oil or gas supplies in the new sanctions package, since this issue remains painful for Europe, due to the great dependence of many countries on Russian energy. In particular, Germany opposes the introduction of restrictions. Nevertheless, the general trend towards a gradual withdrawal of resources from the Russian Federation is unlikely to change even in the event of a hypothetical end of the conflict in Eastern Europe.

GBPUSD
The British pound traded with an uptrend against the US currency during the morning session, trying to regain a foothold above 1.3000. Activity on the market remains quite low, as market participants are waiting for the publication of a block of macroeconomic statistics from the UK on the dynamics of consumer prices. Inflation is one of the key indicators today, since it is on it that world regulators largely rely when choosing the vector of monetary policy. According to current forecasts, the UK Consumer Price Index in March will accelerate from 6.2% to 6.7%, updating record highs. At the moment, the positions of the pound are supported by relatively optimistic data on the UK labor market, which were published the day before. ILO Unemployment Rate unexpectedly decreased from 3.9% to 3.8% with a neutral forecast. Average Earnings Excluding Bonus for the same period accelerated growth from 3.8% to 4.0%, which coincided with analysts' forecasts. Average Earnings Including Bonus increased from 4.8% to 5.4%. Only BRC Like-For-Like Retail Sales were noticeably disappointing, dropping 0.4% in March after rising 2.7% a month earlier.

AUDUSD
The Australian dollar shows ambiguous dynamics of trading against the US dollar during today's Asian session, consolidating near 0.7450. After the release of a block of data from the US on the dynamics of consumer inflation, market participants expect the emergence of new drivers. Statistics reflected the acceleration of annual inflation in the US in March to 8.5%, which is the highest level in 41 years. On a monthly basis, consumer prices rose 1.2% from 0.8%, the highest since September 2005. Consumer Price Index excluding Food & Energy in the US slowed down from 0.5% to 0.3% in March. In annual terms, the indicator fixed at around 6.5%, accelerating only by 0.1%. One way or another, inflation in the United States is growing at a record pace, primarily due to a sharp increase in energy prices. The current geopolitical situation is not conducive to quick changes in the trend, and therefore the US Federal Reserve will probably still decide on a faster tightening of monetary policy in May, raising the rate by 50 basis points at once. Meanwhile, the Australian dollar was supported the day before by data from Australia. National Australia Bank's Business Conditions index rose from 9 to 18 points in March, while the Confidence index for the same period rose from 13 to 16 points, with a forecast of a decline to 8 points.

USDJPY
The US dollar is again trading with an uptrend against the Japanese yen during the Asian session, holding near the record highs updated at the beginning of this week. Despite the publication of statistics on consumer prices in the US the day before, activity on the instrument remains rather low. Annual inflation in the US reached 8.5% in March, which was even higher than analysts' forecasts by 0.1%. However, these data do not change much: the US Federal Reserve has already announced its readiness for a more rapid tightening of monetary policy since May, and otherwise the US economy is still showing rather optimistic results. The prospects for the development of the current geopolitical crisis in Eastern Europe, which further pushes energy prices up, remain unclear. However, the markets have already gotten used to the growing uncertainty, and in addition, the United States still has leverage on commodity markets, since resource prices are largely determined today by the sanctions policy of the United States and its partners. Pressure on the yen is provided by macroeconomic statistics from Japan. Machinery Orders in February collapsed by 9.8% after falling by 2% a month earlier. Market forecasts assumed a decrease of only 1.5%.

SOLIDECN · Apr 14, 2022

EURUSD
The European currency shows moderate growth against the US dollar during the Asian session, developing a "bullish" signal formed the day before, when the instrument retreated from its March 7 local lows. The growth of buying activity in the single currency is facilitated by technical factors, as well as some correction of the US dollar after the publication of consumer and industrial inflation, which, as expected, renewed record highs. The Producer Price Index released the day before rose by 1.4% in March after rising by 0.9% a month earlier. Analysts expected an acceleration of only up to 1.1%. In annual terms, the growth rate of producer prices accelerated from 10.3% to 11.2%, which was also higher than the market forecast at 10.6%. Such statistics once again confirm the fact that many politicians and economists were mistaken last year, arguing that the rapid rise in prices is only a temporary phenomenon. Support for the single currency is also provided by the meeting of the European Central Bank (ECB), which will be held today. Despite the fact that analysts' forecasts do not imply any changes in the vector of the monetary policy of the European regulator, the comments of its representatives will be extremely important. Traders are primarily interested in the timing of the start of the rate increase, since the central banks of developed countries have already managed to resort to tightening monetary policy.

GBPUSD
The British pound is trading with the uptrend against the US currency during the morning session, updating local highs from April 5. The day before, the instrument formed a confident "bullish" signal, retreating from record lows since November 2020, despite the fact that there were few significant reasons for growth. Yesterday, investors were focused on statistics from the UK on inflation, the growth of which has long gone beyond the target levels of the Bank of England, and therefore creates only additional threats to the economic recovery process in the period after the coronavirus pandemic. The Consumer Price Index in the UK rose by 1.1% in March after rising by 0.8% a month earlier. Analysts had expected the indicator to slow down to 0.7%. In annual terms, consumer inflation reached new record highs at 7%, while market forecasts suggested an increase from only 6.2% to 6.7%. The Core Producer Price Index (excluding seasonal adjustments) in March accelerated from 0.7% to 2.0%, while the forecast was 0.9%. In annual terms, the same indicator rose from 9.9% to 12.0%, contrary to forecasts of growth to 10.6%. Finally, the Retail Price Index increased in March by 1% MoM and by 9% YoY, slightly exceeding the expected values of 0.9% and 8.8%, respectively.

AUDUSD
The Australian dollar has shown moderate gains against the US dollar during the Asian session, testing 0.7450 for a breakout. The instrument follows the general trends in the market in recent days, which can be characterized by a corrective decline in the US currency. However, a more confident growth of the Australian dollar is hampered by weak macroeconomic statistics from Australia. The report on the Australian labor market for March, released today, reflected an increase in Employment Change by only 17.9K jobs, while analysts had expected an increase of 40K. Last month, the figure showed an increase of 77.4K. The Unemployment Rate remained at 4% in March, while optimistic experts predicted its decline to 3.9%. The Participation Rate also remained unchanged: in March, the figure consolidated at 66.4%. At the same time, the Melbourne Institute significantly raised its Consumer Inflation Expectations in April: from 4.9%, the figure rose to 5.2%, although initially analysts expected it to be revised down to 4.6%.

USDJPY
The US dollar shows a slight decrease against the Japanese yen in Asian trading, retreating from the record highs updated the day before and again testing 125.00 for a breakdown. The decline of the US currency is largely due to technical factors, while the general news background changes slightly. The day before the US released a block of statistics on producer inflation, which, as expected, reflected the rise in prices to new record highs at 9.2%. The US Federal Reserve has less and less freedom of action at the upcoming meeting in May, where, as expected, the rate will be raised immediately by 50 basis points. Similar measures were taken by the Bank of Canada and the Reserve Bank of New Zealand, bringing their interest rates to 1% and 1.5% respectively. The Japanese yen came under pressure as the US Fed's expected aggressive monetary tightening contrasts sharply with the Bank of Japan's ultra-soft stance, but the general inflation situation around the world could push the Japanese economy, which has long suffered from deflation, to rise. It is still premature to say when the Japanese regulator will think about raising the interest rate, and therefore the dollar will remain more in demand as a safe-haven currency for a long time to come. Today, investors are waiting for the publication of statistics on jobless claims in the US. In addition, March Retail Sales figures will be released, promising a significant increase compared to February.

XAUUSD
Gold prices are consolidating during the morning session near 1970.00. The instrument remains in the area of local highs from March 14, updated the day before, and tends to further increase. However, many markets will be closed tomorrow on the occasion of Good Friday, and therefore traders in general are in no hurry to open new positions, preferring to fix existing profits. The instrument is still supported by high inflationary risks, which are recorded in various regions and confirmed by macroeconomic publications. The day before, the US released data on Producer Price Index, which in March reached a new record at 9.2%. Great Britain, in turn, yesterday reported on the acceleration of consumer inflation to 7%. Against this background, the world's central banks hastily raise rates by 50 basis points at once, which slightly reduces the demand for gold. Markets expect similar actions from the US Federal Reserve, but only in May. At the same time the US regulator plans to launch a cycle of quantitative tightening program in order to reduce its balance sheet.

SOLIDECN · Apr 15, 2022

United States of America

The USD is moderately strengthening against its main competitors – the euro, the pound and the yen.

Today is a public holiday in the USA – Good Friday, so financial institutions are closed, and the activity of bidders is reduced. Investors are preparing for further strengthening of the US currency due to a serious tightening of monetary policy by the US Fed. The correction of rates from 0.50% and above is practically beyond doubt, since these plans were confirmed by all the leading officials of the department. At the same time, most of them are confident that the national economy will withstand the load and will not go into recession. Earlier, the weekly data were published, reflecting the high pace of recovery of national labor. Thus, the number of initial applications for unemployment benefits, although it turned out to be higher than forecasts (185K against 171K), but the total number of citizens receiving payments from the state is steadily decreasing and this time amounted to 1.475M people. It should also be noted that President Joe Biden proposed the candidacy of former Treasury Department official Michael Barr for the post of deputy chairman for banking supervision of the US Fed. In his new position, he will take part in the development of the Dodd-Frank Law restricting the activities of the banking system. If approved by the National Congress, Barr will be tasked with overseeing the country's largest financial institutions, including JPMorgan Chase & Co., Bank of America and Citigroup Inc., as well as monitoring the functioning of security measures for creditors and their compliance with capital requirements.

Eurozone

The euro is moderately weakening against the USD, strengthening against the yen and has ambiguous dynamics paired with the pound.

Today is a public pre-Easter holiday in the EU countries, so financial institutions are closed, and the activity of bidders is reduced. Investors continue to evaluate the results of yesterday's meeting of the European Central Bank (ECB). As expected, the regulator left the rates at the same levels: key at around 0.00%, deposit at -0.50%, margin at 0.25%. Officials did not correct the parameters of the current monetary policy, adhering to the previous plan to wind down the APP program in Q3 2022. Only after some time after that, the increase in rates may begin. ECB President Christine Lagarde told reporters that officials are closely monitoring the situation in the economy and predict the possibility of accelerating inflation, especially in the near future. It is possible that consumer price growth will peak by the middle of the year, after which it will begin to decline against the background of a reduction in consumer demand.

United Kingdom

The pound is strengthening against the yen, but is weakening against the USD and has ambiguous dynamics paired with the euro.

In general, the British economy is showing signs of slowing down: in February, the country's GDP increased by only 0.1% instead of the expected 0.3%, and this is still without taking into account the losses caused by the Ukrainian crisis. Inflation also continues to rise and reached 7.0% in March, despite a three-fold increase in the Bank of England interest rate (to 0.75%). Currently, investors are again concerned about the choice of the agency's course of action: officials may continue to raise rates or take a wait-and-see attitude, while maintaining incentives to support the economy in conditions of uncertainty. Recently, the head of the regulator, Andrew Bailey, hinted at the possibility of the second option, but it is still unknown whether the other officials of the regulator will support him.

Japan

The yen is weakening against its main competitors – the euro, the USD and the pound.

In the absence of significant economic releases, the Japanese currency is traded under the influence of external factors. It is only worth noting that, according to Reuters sources, the Bank of Japan at the upcoming monetary policy meeting this month may raise its inflation forecast for the current fiscal year to almost the target level of 2%. The indicator will change against the backdrop of rising prices for commodities, fuel and food. At the same time, officials will continue to maintain the current ultra-loose monetary policy to support the recovery of the national economy from the coronavirus pandemic. It is still early to tighten the current parameters – the growth of wages does not correspond to the rapid pace of inflation.

Australia

The Australian currency is weakening against the USD and the pound, strengthening against the yen and has ambiguous dynamics paired with the euro.

Quotes are under pressure from weak March data on the Australian labor market: the unemployment rate remained the same at 4.0%, although analysts predicted a value of 3.9%, and employment increased by only 17.9K instead of the expected 40.0K. Nevertheless, the unemployment rate in the country still remains at a low enough level, which gives the Reserve Bank of Australia the opportunity to start a serious tightening of monetary policy after the next elections to the national parliament.

SOLIDECN · Apr 19, 2022

EURUSD

The European currency shows mixed trading dynamics against the US dollar during the Asian session, consolidating near 1.0770 and local lows since April 2020, which were updated last Thursday. Market activity remains subdued, as the news background at the beginning of the week is relatively calm, and noteworthy macroeconomic publications from Europe and the US are not expected today either. Investors will focus on the US statistics on the dynamics of home construction in March, as well as the speech of the US Fed's Charles Evans. However, the policy of the regulator is currently quite transparent. The agency will almost certainly raise the rate by 50 basis points in May and also launch quantitative tightening mechanisms to reduce its balance sheet. But how much these measures will help curb inflation, especially against the background of the escalation of the conflict in Ukraine, is not yet very clear. On Wednesday, the eurozone will release February statistics on the dynamics of Industrial Production, and today the key data on consumer inflation for March will be released. On a monthly basis, prices are expected to accelerate from 0.9% to 2.5%, while in annual terms, consumer inflation could reach 7.5%.

GBPUSD

The British pound is falling during the morning session, testing the strong support at 1.3000 for a breakdown. GBPUSD updates local lows from April 13, when the asset showed a sharp increase. The US currency is supported by expectations of further tightening of monetary policy by the US Federal Reserve and an increase in the key rate by 50 basis points at once during the May meeting of the regulator. In addition, investors are still reluctant to redirect their capital into risky assets, fearing a further deterioration in the global economy. Despite the unprecedented sanctions against Russia, the special military operation on the territory of Ukraine continues, and at the moment the peace talks have faded into the background. The parties, apparently, hope to take more advantageous positions in the negotiation process, having shown success at the front. Meanwhile, Western countries continue to introduce more and more restrictive measures. In the near future, EU officials will discuss the sixth sanctions package, which may relate to the most painful issue, restrictions on the import of oil and oil products. In the EU, there is still no consensus on the embargo on Russian supplies, due to the significant dependence on imported energy resources, but the general trend towards a gradual phase-out is still emerging. Today, investors are waiting for the speech of the representative of the Bank of England Catherine Mann, as well as the Governor of the British regulator Andrew Bailey.

NZDUSD

The New Zealand dollar shows a slight increase against the US dollar during the Asian session, retreating from the local lows of February 28, updated the day before. The positive dynamics of the instrument today is largely of a technical nature, while the news background remains quite modest and does not encourage investors to buy risky assets. Traders drew attention to today's publication of Business NZ PSI. In March, the indicator unexpectedly strengthened from 48.9 to 51.6 points, which turned out to be better than the average analysts' forecasts. In addition, investors continue to evaluate macroeconomic statistics released yesterday from China. In Q1 2022, the country's GDP grew by 1.3% in quarterly terms and 4.8% in annual terms, which turned out to be noticeably better than market expectations at the level of 0.6% QoQ and 4.4% YoY. In turn, the pace of Industrial Production in China in March slowed down from 7.5% to 5%, while Retail Sales showed a sharp decline by 3.5% after an increase of 6.7% in February. Analysts attribute the decline in Retail Sales dynamics to quarantine, which China was forced to introduce in some provinces in response to an outbreak of coronavirus. This Thursday, New Zealand is expected to release statistics on Consumer Price Index for Q1 2022. Forecasts suggest acceleration in price dynamics from 1.4% to 2.0%, and in annual terms, inflation could reach a new record high of 7.1%.

USDJPY

The US dollar continues to grow steadily against the Japanese yen in Asian trading, renewing 20-year highs. Demand for the dollar is supported by optimistic macroeconomic statistics from the US, as well as expectations of further tightening of monetary policy by the US Federal Reserve, and at a more active pace. As early as May, the Fed may raise the rate by 0.5% and launch a quantitative tightening program to reduce its balance sheet. The Bank of Japan, in turn, is still taking a wait-and-see attitude, due to the fact that inflation risks are significantly lower and have not yet reached the regulator's target levels. At the same time, the country's authorities are already cautious about the sharp depreciation of the national currency. Yesterday, Japanese Finance Minister Shun'ichi Suzuki expressed concerns about the current exchange rate of the yen, noting that sharp changes in the currency markets increase negative risks for the country's economic and financial security. The official also came up with the idea of discussing this issue with the United States at the upcoming G7 meeting.

XAUUSD

Gold prices are consolidating at the beginning of the week, staying close to the psychological level of 2000.00. The activity of investors in the market after the Easter holidays remains quite low. In turn, the demand for the precious metal is held back by the risks of further deterioration of the global economic situation as inflation rises rapidly in the global economy. Traders have become disillusioned with the idea of a possible peace agreement between Russia and Ukraine in the near future, as the military conflict continues to intensify. Western countries, meanwhile, are imposing more and more economic sanctions against the Russian economy, pushing global inflation to new record highs. In turn, the further growth of the gold rate is hampered by expectations of tightening monetary policy on the part of the world's leading central banks. In particular, in May, the US Federal Reserve is expected to raise the rate by 50 basis points at once.

SOLIDECN · Apr 21, 2022

EURUSD

The European currency shows a moderate decline against the US dollar during the Asian session, correcting after a rather active growth the day before, which brought the instrument to new local highs from April 14. In general, the situation on the market is changing little and investors are only reacting to the emergence of mixed macroeconomic statistics in Europe and the US. In turn, the demand for the dollar is still supported against the backdrop of escalating tensions in Ukraine, as well as due to expectations of an early tightening of the US Federal Reserve's monetary policy in early May. The European Central Bank (ECB) in this sense lags behind the US regulator. Earlier, calls for a possible increase in interest rates were shattered by the skepticism of the President of the ECB, Christine Lagarde, who announced additional risks for the region's economy. However, the "hawks" do not leave attempts to put pressure on the European regulator against the backdrop of extremely alarming inflation data. The day before, the markets drew attention to the German Producer Price Index, which in March accelerated from 1.4% to 4.9%, while market forecasts assumed growth of only up to 2.6%. In annual terms, consumer inflation jumped from 25.9% to 30.9%, which also exceeded investors' estimates of an increase to 29.1%. Today, the focus of investors will be on statistics on consumer inflation in the euro area. Forecasts suggest acceleration in price dynamics to 2.5% in monthly terms and 7.5% in annual terms.

GBPUSD

The British pound is traded with mixed dynamics against the US currency during the morning session, consolidating near 1.3050. The pound showed a fairly active growth the day before, supported by weak macroeconomic statistics from the US, but on Thursday the "bullish" momentum faded noticeably, as trading participants await the publication of new data, as well as speeches by the representative of the Bank of England, Catherine Mann, and the Governor of the British regulator, Andrew Bailey. US statistics released on Wednesday showed a 2.7% drop in Existing Home Sales, after falling by a more significant 8.6% a month earlier. In absolute terms, Sales fell from 5.93 million to 5.77 million, slightly worse than market forecasts of 5.8 million. Until the end of the week, investors also expect the release of statistics on Retail Sales in the UK for March and business activity in the manufacturing and services sector from Markit in April. Forecasts for all indicators are rather negative, and therefore the pressure on the pound may increase by the end of the week.

AUDUSD

The Australian dollar is showing mixed trading against the US dollar during the Asian session, holding near 0.7430. Since the opening of the daily session, the instrument has been trading mainly with the downtrend, but this still fits into the framework of a weak technical correction after active growth the day before. The Australian and New Zealand currencies rose significantly on Wednesday, reacting to the appearance of rather weak macroeconomic statistics from the US on the dynamics of Existing Home Sales. As a result of March, Existing Home Sales fell again by 2.7% after a collapse of 8.6% a month earlier, which turned out to be much worse than analysts' forecasts. In addition, the quotes of AUD/USD were supported by statements by representatives of the US Federal Reserve, which weakened the hopes of investors for more active actions of the regulator aimed at tightening monetary policy in the country. The President of the Chicago Fed, Charles Evans, said that he adheres to a plan to raise the rate twice, by 0.50% each time. In turn, Fed spokesman Rafael Bostic, who is the President of the Fed of Atlanta, noted that raising the rate by more than 0.50% would be premature and could have negative consequences for the growth of the US economy.

USDJPY

The US dollar is recovering its position against the Japanese yen in Asian trading, correcting after a downtrend the day before, when the US currency showed a decrease in almost the entire spectrum of the market against the background of the rhetoric of the US Federal Reserve, which significantly corrected investors' expectations regarding a possible rate hike at the May meeting by more than 0.50%. In addition, traders drew attention to not the strongest statistics from the US on the dynamics of Existing Home Sales. In turn, pressure on the yen was exerted by data from Japan. In March, Exports from the country slowed down from 19.1% to 14.7%, which turned out to be worse than analysts' forecasts at the level of 17.5%, while Imports for the same period decreased from 34.1% to 31.2%, while investors expected 28.9%. All this led to a trade deficit in March at -412.4 billion yen, which was significantly worse than the -100.8 billion yen forecast by analysts. Additional pressure on the position of the instrument was exerted by the Tertiary Industry Index of Japan, which fell by 1.3% in February after a decrease of 0.7% a month earlier.

XAUUSD

Gold prices are consolidating near 1950.00, showing multidirectional dynamics yesterday and during today's Asian session. The quotes were slightly supported yesterday by the statements of the US Federal Reserve, which reduced the likelihood of a more rapid tightening of monetary policy during the May meeting of the regulator. An additional growth factor was not the most confident macroeconomic statistics from the US, which allowed the USD Index to retreat from its record highs. The pressure on gold, in turn, is gradually increasing as there is talk of a possible overcoming of the peak of inflation in the foreseeable future. Today, traders are waiting for the publication of statistics on the dynamics of Jobless Claims in the US. In addition, the Fed's Chairman Jerome Powell is expected to give a speech during the day.

SOLIDECN · Apr 22, 2022

EURUSD

The European currency shows flat dynamics of trading against the US dollar during today's Asian session, consolidating near the level of 1.0840. The day before, the single currency showed active growth, having updated local highs from April 7, but closer to the end of the daytime session, the "bulls" lost some of their gains. The emergence of a strong "bullish" impetus was facilitated by the statements of the Vice President of the European Central Bank (ECB) Luis de Guindos, who made a "hawkish" statement about the possibility of raising the key interest rate in July. At the same time, the President of the European regulator, Christine Lagarde, last week spoke with the opposite point of view, reducing the likelihood of a rate hike in the coming months. One way or another, the ECB will have to consider a monetary tightening scenario as the region's economy faces rapid inflation, but it is important not to harm the economic recovery in the post-coronavirus period. Slight support for the single currency today was provided by statistics on consumer inflation in the eurozone. The Core Consumer Price Index from the ECB in March was revised from 3.0% to 2.9%. The monthly core inflation rate remained unchanged at 1.2%. The overall level of consumer price growth in March amounted to 7.4%, which is 0.1% lower than previous estimates.

GBPUSD

The British pound traded with mixed dynamics against the US currency during the morning session, preparing to end the week with minimal changes. GBP/USD is testing 1.3020 for a breakdown, waiting for new drivers to appear on the market. Today, investors are focused on the statistics on the dynamics of Retail Sales in the UK. The data is likely to be negative, given the soaring consumer prices and the rather bleak prospects for further economic recovery. Also statistics from Markit on business activity in the manufacturing and services sector for April will be released during the day. Forecasts suggest a drop in Services PMI from 62.6 to 60 points, while the Manufacturing PMI may show a decline from 55.2 to 54.0 points. With the opening of the American session, the speech of the Governor of the Bank of England Andrew Bailey is expected. In the meantime, the British statistics on the GfK Consumer Confidence are at the traders' disposal. In April, the indicator fell from -31 to -38 points, which turned out to be significantly worse than the expected decline to -33 points.

NZDUSD

The New Zealand dollar shows an active decrease against the US dollar during the Asian session, developing a strong "bearish" momentum that formed the day before. NZD/USD is testing 0.6700 for a breakdown and updating local lows from February 28. The pressure on the instrument is again exerted by the growing US dollar, which is supported by the expectations of an early tightening of the monetary policy of the US Fed. The regulator expects to raise the interest rate immediately by 50 basis points already during its May meeting. In addition, the Fed is likely to launch a quantitative tightening program that will help reduce its balance sheet. Additional pressure on the NZ dollar is exerted by the macroeconomic statistics from New Zealand released yesterday. The Consumer Price Index in Q1 2022 accelerated from 1.4% to 1.8%, which turned out to be only 0.2% worse than market expectations. In annual terms, inflation reached a new record high of 6.9%, although analysts had projected an increase to 7.1%.

USDJPY

The US dollar shows a slight decline against the Japanese yen in Asian trading, again testing the level of 128.00 for a breakdown. In recent days, USD/JPY has been trading with multidirectional dynamics, but the dollar is still holding near record highs, which were updated on April 20. Moderate support for the Japanese currency today is provided by relatively optimistic macroeconomic statistics from Japan. National Consumer Price Index in March accelerated from 0.9% to 1.2%, which was only 0.1% worse than analysts' forecasts. Excluding fresh food prices, inflation in the country accelerated from 0.6% to 0.8%. Jibun Bank Services PMI was also positive. In April, the indicator unexpectedly rose from 49.4 to 50.5 points, while market forecasts suggested its decline to 49 points. In turn, Jibun Bank Manufacturing PMI still showed a decrease from 54.1 to 53.4 points, contrary to forecasts of growth to 55.7 points.

XAUUSD

Gold prices are consolidating near 1950.00 during the Asian session, preparing to end the week with a moderate decline. The instrument continues to be supported by the existing geopolitical risks in connection with the conduct of a special military operation by Russia on the territory of Ukraine. In addition, the demand for the precious metal as a hedging instrument is growing against the backdrop of a sharp increase in inflationary pressures. On the other hand, the world's central banks have begun raising interest rates quite aggressively, which makes holding gold less attractive, since it does not generate interest income. In May, the market expects the US Federal Reserve to adjust the rate by 50 basis points. Today investors will focus on a block of macroeconomic statistics from the US on business activity in the manufacturing and services sector from Markit for April. Analysts' forecasts are neutral, and therefore significant fluctuations in the US currency against their background are not expected.

SOLIDECN · Apr 25, 2022

EURUSD

The European currency shows a moderate decline against the US dollar during the Asian session, building on the "bearish" momentum formed at the end of last week, when the euro retreated from its local highs from April 7. The pressure on the instrument is exerted by the previous factors of a gradually strengthening dollar against the backdrop of deterioration in global economic prospects. The military conflict in Ukraine is intensifying, despite the unprecedented sanctions imposed on the Russian economy by Western countries. Meanwhile, the EU is preparing another, sixth in a row, package of sanctions, which will likely be announced on April 25-29 and will significantly reduce the possibility of energy supplies from Russia. The issue of oil and gas imports for European countries is still extremely painful. Nevertheless, quite clear trends have been identified, and, not without pressure from the White House administration, the EU is gradually reducing its energy dependence on Russian resources, which, in turn, leads to an upward correction in energy prices, simultaneously pushing up the already high inflation in region. The macroeconomic statistics from Europe published last Friday did not have a noticeable impact on the dynamics of the instrument, despite the fact that the data, in general, was not disappointing. The eurozone Composite Manufacturing PMI rose from 54.9 to 55.8 in April, beating its forecast of a decline to 53.9 points. The Services PMI for the same period strengthened from 55.6 to 57.7 points, contrary to forecasts of a decline to 55 points.

GBPUSD

The British pound is trading with the downtrend at the beginning of the week, testing the psychological level of 1.2800 for a breakdown. The pound is developing a strong downward momentum, formed at the end of last week in response to the publication of disappointing macroeconomic statistics from the UK. UK Retail Sales fell 1.4% in March after falling 0.5% a month earlier. Analysts expected a decline of only 0.3%. In annual terms, sales volumes fell from 7.2% to 0.9%, while market forecasts assumed an increase of 2.8%. Additional pressure on the instrument was exerted by data on the GfK Consumer Confidence in the UK in April. The index fell from -31 to -38 points, which turned out to be noticeably worse than experts' estimates of a decline to -33 points. Finally, Markit Services PMI in April fell from 62.6 to 58.3 points, while analysts predicted a decline to 60 points. Thus, extremely weak macroeconomic statistics from the UK prompted investors to lower their expectations of further tightening of macroeconomic policy by the Bank of England in the near future.

AUDUSD

The Australian dollar shows a steady decline during the morning session, updating local lows from February 28. The instrument has been developing a downtrend since last Thursday, when the Fed Chairman Jerome Powell once again announced the need to raise interest rates by 0.50% at once at the May meeting. In addition, the regulator may launch a quantitative tightening program, which its representatives have also often spoken about recently. Investors took the official's speech as an additional signal to reduce risky positions, which provoked a noticeable strengthening of the US currency. The macroeconomic statistics released on Friday from Australia failed to slow down the development of the "bearish" dynamics for the instrument, despite the fact that the data turned out to be quite positive in general. The Commonwealth Bank Manufacturing PMI in April rose from 57.7 to 57.9 points, while analysts had expected growth to only 57.8 points. The Services PMI for the same period strengthened from 55.6 to 56.6 points, but the market expected a much more noticeable increase to 58.5 points. At the same time, the Composite PMI rose from 55.1 to 56.2 in April.

USDJPY

The US dollar shows flat dynamics against the Japanese yen in Asian trading, consolidating near 128.50 and new record highs, updated in the middle of last week. Low demand for risk still supports the positions of the US currency; however, the level of 130.00 still seems to be a barrier, for which there are few current drivers on the market. The macroeconomic statistics from Japan released at the end of last week turned out to be ambiguous. The National Consumer Price Index in Japan rose by 1.2% in March after rising by 0.9% a month earlier. Analysts expected growth of 1.3%. At the same time, Jibun Bank Manufacturing PMI in April fell from 54.1 to 53.4 points, which was worse than the expected 55.7 points. The yen is slightly supported by the Japanese macroeconomic data released today. Coincident Index in February increased from 96.3 to 96.8 points, while analysts expected a decrease to 95.5 points.

XAUUSD
Gold prices are falling during the morning session, developing a confident downtrend formed in the short term. The instrument is testing the level of 1915.00 for a breakdown, updating local lows from April 6. The pressure on the asset is still exerted by the prospects for further tightening of monetary policy by the US Federal Reserve. Last week, the Chair of the Fed, Jerome Powell, once again confirmed the intention of the regulator to raise the interest rate immediately by 0.50% already at the May meeting. In addition, in May, the US Federal Reserve may launch a quantitative tightening program, the need for which has also been discussed for more than one month. In turn, the demand for gold is supported by the general negative mood of investors, disappointed by the decline in global economic prospects. The problem of inflation, which updates record highs in many regions, reacting to the rapid rise in energy prices, is still acute.

SOLIDECN · Apr 26, 2022

EURUSD

Euro quotes are consolidating after a "bearish" start to the week, which led EURUSD to update record lows since March 2020. The reason for the emergence of upward dynamics on Tuesday are technical factors, while the news background continues to strengthen the dollar as a "safe" asset. Currently, traders are concerned about the prospects for the recovery of the global economy against the backdrop of further escalation of the conflict in Ukraine, which is the cause of the crisis in the commodity areas. In addition, there are reports from Beijing of a rapid increase in the incidence of coronavirus infection among the local population. Recently a large-scale lockdown ended in Shanghai, and now a similar prospect seems to threaten the capital of China. Over the past day, about 22K cases of COVID-19 were detected in the country, and more than 21K infected occurred in Beijing. Further tightening of coronavirus restrictions could lead to a decline in energy consumption in the Chinese economy. Meanwhile, macroeconomic statistics from Europe published on Monday turned out to be optimistic: the IFO Business Climate in Germany rose from 90.8 to 91.8 points in April, while analysts expected it to decline moderately to 89.1 points. The Current Assessment indicator for the same period rose from 97.1 to 97.2 points, which also turned out to be noticeably better than market expectations at the level of 95.8 points. The index of Economic Expectations in April strengthened from 84.9 to 86.7 points, ahead of forecasts at the level of 83.5 points.

GBPUSD

The pound is showing an uptrend against the US currency, correcting after a sharp decline over the past two sessions, which caused the instrument to renew all-time highs for the instrument since September 2020. GBPUSD received a signal for a technical correction, but analysts note that the outlook for the British currency is very controversial. Against the background of the rapidly developing energy crisis in Europe, many experts believe that in the future one should not exclude the possibility of a recession in the British economy, which is most actively involved in the anti-Russian sanctions policy after the start of a special military operation on the territory of Ukraine. In addition, the consequences of Brexit, which at one time managed to be avoided relatively easily, can now reappear with a larger negative effect. Also traders pay attention to a rather difficult position of the Bank of England. Earlier, the Governor of the British regulator, Andrew Bailey, admitted that the issue of adjusting interest rates is now becoming more acute. On the one hand, officials are forced to fight record inflation; on the other hand, it is necessary to prevent the national economy from falling into recession.

AUDUSD

The Australian dollar is correcting during morning trading, recovering from a three-day "bearish" rally, which led to the renewal of local lows from February 24. The growth of the instrument on Tuesday is supported by technical factors, while the informational background changes slightly. In turn, the pressure on the position of the Australian currency is still exerted by the disappointing prospects for the recovery of the global economy. The escalation of the crisis in Ukraine at the moment does not mean that the conflict, or at least its acute phase, will end in the near future. Meanwhile, sanctions pressure on Russia continues to intensify, approaching the most sensitive aspects of the bans, the energy imports. Any restrictions beyond those already in place will inevitably lead to additional price increases, which will aggravate the already difficult situation with inflation and the energy crisis in Europe and in the world as a whole. Today, the focus of investors will be on a block of statistics from the US on the dynamics of Durable Goods Orders, as well as data on New Home Sales in March. Interesting data from Australia will appear only on Wednesday, with the release of statistics on consumer inflation for Q1 2022, and analysts suggest acceleration in prices from 3.5% to 4.6% year on year.

USDJPY

The US dollar is developing flat trading dynamics in tandem with the yen during the Asian session, consolidating near 128.00. The development of the uptrend stopped last week, when USDJPY made new record highs, and the market plunged into a correction. Meanwhile, demand for the US currency is increasing in anticipation of a more aggressive approach to tightening monetary policy parameters by the US Federal Reserve, pushing buyers to open new deals, while the Bank of Japan is only cautious about the risks of rising inflation in the country. The latter, however, does not frighten Japanese investors at all, who are accustomed to the deflationary characteristics of the national economy. The Bank of Japan is likely to keep its rate unchanged at -0.10% at its meeting on Thursday and refrain from major adjustments in its forecasts for further actions, as rising commodity prices force it to focus on maintaining the economic recovery after the coronavirus pandemic. Macroeconomic statistics from Japan, released the day before, turned out to be restrainedly optimistic: the Coincident Index in February rose from 96.3 to 96.8 points, which turned out to be better than the negative forecasts of analysts for a decline to 95.5 points. The Leading Economic Index for the same period fell from 101.2 to 100.0 points, while the market expected 100.9 points. The Unemployment Rate in the country in March also corrected down from 2.7% to 2.6%.

XAUUSD

Gold prices are slightly increasing during the morning session, correcting after an active decline at the beginning of this week, which led XAUUSD to updating local lows from March 29. At the moment, the quotes are in the area of 1900.00 and are waiting for new drivers to move in the market. The pressure on the instrument is still exerted by expectations of further tightening of monetary policy by the US Federal Reserve. Already during the May meeting, members of the Fed can raise the key interest rate by 50 basis points, as well as launch a quantitative tightening program. In turn, the demand for "safe" gold is supported by the escalation of the conflict on the territory of Ukraine and the rapid growth of inflationary risks against the backdrop of further growth in energy prices.

SOLIDECN · May 4, 2022

EURUSD
The European currency is showing multidirectional dynamics of trading in a pair with the US dollar during the Asian session, consolidating around 1.0500. Market activity remains subdued as traders await today's release of the US Federal Reserve's interest rate decision. Recall that the consolidated forecast assumes an increase in the indicator by 50 basis points at once, in addition, it is expected to announce the launch of a program to reduce the department's balance sheet by 9 trillion dollars. In turn, the European Central Bank (ECB) is still taking a wait-and-see position, despite the rapid growth of inflation in the region, although "hawkish" rhetoric is observed in the speeches of officials of this regulator as well. Earlier, the ECB executive board member, Isabel Schnabel, spoke in favor of the possibility of raising the rate in July, given that fuel and food prices will continue to increase. The macroeconomic statistics from Europe, published the day before, did not affect the dynamics of the instrument too much. Meanwhile, the Unemployment Rate in the euro area in March fell from 6.9% to 6.8%, which was only 0.1% worse than market expectations. The Producer Price Index confirmed the further acceleration of manufacturing inflation: in March, the indicator rose from 1.1% to 5.3%, and accelerated from 31.5% to 36.8% in annual terms.

GBPUSD
The pound shows flat trading dynamics against the US currency during the morning session on May 4, consolidating near the level of 1.2500. Traders are in no hurry to open new trading positions, preferring to wait for the publication of the US Fed Meeting Minutes. Analysts have little doubt that the key interest rate will be raised by 50 basis points at once; however, some of them allow for a correction by 75 basis points, citing record inflation over 40 years, as well as fairly stable trends in the labor market as arguments. Macroeconomic statistics from the UK released yesterday provided additional support to GBP. The Manufacturing PMI from Markit in April rose from 55.3 to 55.8 points, which turned out to be better than the neutral forecasts of analysts, and the BRC Shop Price Index released today showed an acceleration year-on-year from 2.1% to 2.7% in March, which coincided with analysts' estimates.

NZDUSD
The New Zealand dollar is slightly strengthening its position, recovering from the "bearish" start of the trading week, which led to the renewal of record lows since June 2020. Investors are cautious and do not rush to open new trading positions in anticipation of the publication during the day of the final minutes of the two-day meeting of the US Federal Reserve, at which the key interest rate is expected to be increased immediately by 50 basis points. As for the New Zealand macroeconomic statistics, it failed to provide significant support for the instrument quotes. The Unemployment Rate remained at the level of 3.2%, while the Participation Rate decreased from 71.1% to 70.9%, and the Employment Change increased by only 0.1% in the quarterly terms.

USDJPY
The trading instrument shows mixed dynamics, remaining close to the record highs updated at the end of last week. Now the USD/JPY pair is testing 130.00 for a breakout; however, the "bulls" prefer to wait for the US Federal Reserve meeting, at which the rate can be raised immediately by 50 basis points. The markets have already included such an outcome in the current quotes of the instrument, and therefore a noticeable increase in the US currency may not follow. However, officials' comments will continue to be extremely important for assessing the situation in the near future. In addition, the possibility of a rate increase by 75 basis points is not ruled out, although this scenario remains unlikely. Japanese markets are closed on Wednesday due to the national holidays, and therefore new drivers for the movement of the trading instrument will appear only at the end of the week, when the April statistics on consumer price dynamics in the Tokyo region will be published.

XAUUSD
Gold prices are consolidating near the level of 1865.00 after an attempt at corrective growth the day before, which did not allow XAU/USD to consolidate on new local lows from February 16. The pressure on quotes is exerted by the growth in the yield of US Treasury bonds: the indicator for 10-year bonds last Monday exceeded 3% for the first time since December 2018 and remains in this area at the present time. The investment attractiveness of the precious metal is decreasing before the start of the US Federal Reserve's meeting on monetary policy, which will be held today at 20:00 (GMT+2). US officials are expected to raise interest rates by 50 basis points at once, and also announce the launch of a quantitative tightening program, which should help to reduce the almost 9 trillion dollars balance sheet. Higher short-term interest rates and US bond yields tend to increase the opportunity cost of holding zero-yield bullion.

SOLIDECN · May 5, 2022

EURUSD
The European currency shows mixed trading dynamics, consolidating near 1.0600 and local highs from April 27. The day before, EUR/USD showed the strongest growth in the last few weeks, which was the market's reaction to the results of the two-day meeting of the US Federal Reserve. As expected, the US regulator raised the interest rate by 50 basis points to the range of 0.75%–1.00% and announced the start of a quantitative tightening program, but it will not immediately reach the final volumes of purchases. From June 1, the Fed will start selling securities for a total of 47.5 billion dollars, after which it will increase the total monthly sales to 95 billion dollars within three months. The "hawks", who expected that the regulator would immediately bring purchases to the final amount, were somewhat disappointed by this decision. Additional pressure on the dollar was exerted by the rhetoric of the Chair of the US Federal Reserve, Jerome Powell, who said that the issue of raising the interest rate by 50 basis points would also be discussed at the next meetings. Thus, the risks that the indicator will be corrected at a more aggressive pace have almost completely disappeared. In turn, pressure on the euro was exerted by frankly weak statistics on Retail Sales in the eurozone. In March, the indicator fell by 0.4% after rising by the same amount a month earlier, and in annual terms, the pace slowed sharply from 5.2% to 0.8%, while analysts had expected an increase of 1.4%.

GBPUSD
The pound is declining, correcting after the active growth the day before, which was caused by the publication of the final minutes of the meeting of the US Federal Reserve. The regulator, as expected, raised the rate by 50 basis points, but decided to slow down the pace of the quantitative tightening program. Also, the Chair of the Fed Jerome Powell signaled that the authorities have no plans to increase the rate by 75 basis points at the next meetings. Today, investors are actively closing their long positions on the pound, preferring to wait for the results of the Bank of England meeting. It is expected that the British regulator, following the US Federal Reserve, will raise the interest rate, but only by 0.25%, bringing it to the level of 1.00%. Traders will follow the updated forecasts and plans of the regulator in the field of monetary policy regulation.

AUDUSD
The Australian dollar shows negative dynamics against the US currency during the Asian session, correcting after a sharp rise the day before, which contributed to the movement of AUD/USD quotes to new local highs from April 22. Investors evaluate the results of a two-day meeting of the US Federal Reserve, at which officials raised interest rates by 50 basis points to 1.00%, and also announced a phased introduction of a quantitative tightening program. From June this year, the regulator will begin to reduce its balance sheet by 47.5 billion dollars a month, and from September the pace will increase to 95 billion dollars. In turn, the positive macroeconomic statistics provided significant support to the Australian dollar. The volume of Retail Sales in Australia increased by 1.6% in March after an increase of 1.8% a month earlier, although analysts had expected a sharp slowdown in the value to 0.6%. Today, the AUD/USD quotes are strengthening after the release of statistics on the Trade Balance, the surplus of which in March increased from 7.457 to 9.314 million Australian dollars, ahead of forecasts at the level of 8.500 million Australian dollars, while the current dynamics is fixed against the backdrop of a 5% decrease in imports, and export volumes remained virtually unchanged.

USDJPY
The day before, the US dollar showed a moderate decline against the yen, reacting to the publication of the minutes of the meeting of the US Federal Reserve. Despite the expected increase in the interest rate, as well as the launch of the quantitative tightening program, market participants were still disappointed by the rather cautious actions of the US financial regulator, as they were counting on a more aggressive approach in adjusting monetary policy parameters. An additional negative factor for the dollar was weak macroeconomic statistics from the US. The ADP report on employment in the private sector in April showed a drop in Nonfarm Payrolls from the previous 479 thousand to 247 thousand, while analysts expected a value of 395 thousand. The ISM Services PMI in April also showed an active decline from 58.3 to 57.1 points, while the market expected the index to rise to 58.5 points.

XAUUSD
Gold prices are actively growing, again trying to consolidate above 1.9 thousand dollars per troy ounce. The "bulls" are developing an upward momentum formed on Tuesday, when the instrument retreated from its local lows of February 16. The investor activity was facilitated by the results of the meeting of the US Fed. As expected, the regulator raised interest rates by 50 basis points and also announced the start of a quantitative tightening program starting June 1. Initially, it is planned to buy securities for a total of 47.5 billion dollars, but then within three months the volume will be increased to 95 billion dollars. Thus, the US financial authorities decided not to rush to tighten monetary policy, which crossed out the premature conclusions of traders on the upcoming rate hikes by 75 basis points at once. An additional negative factor for the dollar was weak macroeconomic statistics from the US. The ADP report on employment in the private sector in April showed a drop in Nonfarm Payrolls from the previous 479 thousand to 247 thousand, while analysts expected a value of 395 thousand. The ISM Services PMI in April also showed an active decline from 58.3 to 57.1 points, while the market expected the index to rise to 58.5 points.

SOLIDECN · May 9, 2022

EURUSD
The European currency loses value against the US dollar during the Asian session on May 9, testing the level of 1.0500 for a breakdown. The EUR/USD pair develops flat dynamics in the short term and remains around record lows, renewed on April 28. Market sentiment does not have excessive demand for risky assets, which does not allow the trading instrument to change the trend. Also, the dollar is supported by the rather active course of the US Federal Reserve for further tightening of monetary policy, while the European Central Bank (ECB) is not ready for decisive action. The representatives of the European regulator are only discussing the possible start of the interest rate hike cycle, despite the alarming rise in inflation in the region due to the military crisis around Ukraine. The timing of the possible start of tightening monetary policy is called the end of summer, but there have been no official statements on this subject so far. The March macroeconomic statistics from Germany, published last Friday, put additional pressure on the currency positions. Thus, the volume of industrial production in the EU's largest economy fell by 3.9% after rising by 0.1% last month, although analysts expected a correction of only 1.0%. Experts believe that the risks of recession in the German and European economies continue to rise in the current situation.

GBPUSD
The pound starts trading with a rather active decline against the US currency, renewing record lows of June 2020 and testing 1.2270 for a breakdown. After a sharp rapid fall last week, the GBP/USD pair remains under pressure from the development of a military conflict on the territory of Ukraine. At the same time, the EU countries and their partners continue to impose new sanctions against the Russian economy, thereby exacerbating the situation with inflation in the region. An embargo on the supply of Russian oil and gas, which is currently impossible due to the lack of agreement between all bloc members, may become a particularly harmful issue. The pound practically did not react to the tightening of monetary policy by the Bank of England last week and only strengthened the downward dynamics against the backdrop of a revision of economic prospects for the near future. The British regulator raised the interest rate by 25 basis points to 1.00% per annum. The decision was taken unanimously by all nine board members.

AUDUSD
The Australian dollar is actively decreasing during the Asian session, renewing local lows since the end of January this year and testing the level of 0.7000 for a breakdown. The trading instrument remains under pressure from the rapidly strengthening US dollar and low investors' demand for risky assets. Traders react to the report on the US labor market, published last Friday, which largely fell short of analysts' expectations. Thus, the number of new jobs created by the national economy in April increased by 428K, exceeding experts' forecasts of 391K, while the average wage rate slowed down from 0.5% to 0.3% MoM, with preliminary estimates of 0 .4%, and from 5.6% to 5.5% YoY. The unemployment rate in the US remained at the same level of 3.6%, while the market expected a decline to 3.5%. In general, the labor market shows resilience, and the US economy is close to full employment. At the beginning of the new trading week, the pressure on the position of the Australian currency is exerted by poor macroeconomic statistics from China. Thus, for April, exports slowed sharply from 14.7% to 3.9%, while imports showed a negative trend at –2% YoY after a decrease of 0.1% last month. At the same time, the Chinese economy manages to maintain a trade surplus of 51.12B dollars, slightly higher than the previous value of 47.38B.

USDJPY
The US dollar is strengthening its position against the Japanese yen during the Asian trading session, retesting the level of 131.00 for a breakout and approaching the local highs of April 28 within the general market trend, which contributes to the strengthening of the "safe" dollar amid worsening global economic prospects. Investors are less interested in the yen as a shelter asset since the difference in interest rates between the US and Japan supports the US currency. Meanwhile, macroeconomic statistics published at the end of last week provide more support to the yen. Thus, April's inflation in the Tokyo region showed a sharp acceleration from 1.3% to 2.5% YoY, which significantly outstripped analysts' forecasts of 1.9%. Excluding food and energy prices, the figure accelerated to 0.8%, while the market expected a decline of 0.5%. At the beginning of a new trading week, the yen quotes are strengthening after the publication of business activity in the manufacturing sector. According to data from Jibun Bank, in April, the index rose from 50.5 to 50.7 points.

XAUUSD
Gold prices are correcting, leveling last week's corrective growth attempt, which allowed the XAU/USD pair to retreat from the local lows of February 16. The metal noticeably loses to the dollar as a shelter asset because, unlike the American currency, it does not bring interest income to its owners. As the US Federal Reserve tightens monetary policy and raises interest rates, this difference becomes more and more noticeable, provoking market participants to form new short positions on the instrument. Meanwhile, the demand for gold remains quite high due to the general uncertainty in the global economy. Investors are also concerned about the situation with COVID-19 in China, where authorities are still trying to contain the outbreak, which has led to significant restrictions in Shanghai and Beijing.

SOLIDECN · May 13, 2022

EURUSD
The European currency showed weak growth against the US dollar during the Asian session, correcting after a sharp decline the day before, as a result of which the single currency updated record lows for the instrument since January 2017. EUR/USD is trying to consolidate above 1.0400, but so far there are clearly not enough drivers for the growth of the single currency. During the day, investors will pay attention to the publication of statistics on the dynamics of Industrial Production in the eurozone for March, but the current forecasts of analysts do not suggest that the euro will be able to get any support for them. However, the instrument may show growth solely on technical factors, given that the macroeconomic calendar from the US is also neutral. The dollar is still in high demand in the market amid concerns about the prospects for growth in the global economy. US consumer inflation data released on Wednesday indicated that prices may be peaking but still high enough to prevent the US Fed from easing monetary tightening pressure.

GBPUSD
The British pound shows an uptrend in trading, correcting after another decline the day before, as a result of which GBP/USD updated its lows since May 2020. The growth of the pound on Friday is due to the strengthening of technical factors, while the fundamental picture changes slightly and still contributes to the further weakening of the British currency. The macroeconomic data released the day before in the UK turned out to be disappointing, which increased fears of a possible recession in the national economy. In March, the country's GDP fell by 0.1%, while analysts expected it to increase by 0.1%. In quarterly terms, growth slowed down from 1.3% to 0.8%, which was also worse than forecasts at 1.0%, while in annual terms, the economy is still showing positive dynamics and, according to the latest data, strengthened from 6.6% to 8.7%, only a little short of the expected value of 9%. The pace of Industrial Production in the country in March showed a decrease of 0.2% after falling by 0.3% a month earlier, although preliminary market estimates suggested a positive trend at the level of 0.1%.

AUDUSD
The Australian dollar is showing active corrective growth against the US dollar during the morning session, recovering from a strong decline the day before, as a result of which AUD/USD hit its record lows since June 2020. Investors fix short positions, which leads to a technical correction, while the fundamental picture of the instrument changes slightly. The US dollar is still in high demand in the market as a safe-haven currency, as investors fear a further slowdown in the global economy, which may be exacerbated by the "hawkish" policy of the world's leading central banks. The latest data from the US indicated that consumer inflation may be at its peak, but so far its slowdown is slower than analysts' expectations. There is no need to count on a quick change in the vector of the US Federal Reserve's monetary policy, and as the interest rate rises in the future, the growth prospects of the American economy are likely to decline. In turn, pressure on the positions of the Australian currency today is exerted by weak macroeconomic statistics from Australia. HIA New Home Sales fell 1.2% in April after rising 3.9% in March.

USDJPY
The US dollar shows corrective growth against the Japanese yen in Asian trading, correcting after a sudden decline the day before, which led to the renewal of local lows from April 27. The Japanese yen is one of the few currencies on the market against which the dollar showed a negative trend on Thursday. Among other things, analysts attribute this behavior to the "hawkish" policy of the US Federal Reserve, which in the foreseeable future may lead to a slowdown in economic growth in the country. In its turn, the Bank of Japan still maintains a wait-and-see attitude and has not yet launched a cycle of raising the interest rate. Existing inflationary risks have quite a positive effect on the Japanese economy, which is fairly prone to deflationary phenomena, which makes the yen quite an attractive safe-haven currency, despite the growing gap in Japanese and US interest rates. The yen was additionally supported yesterday by optimistic macroeconomic statistics from Japan. In April, Eco Watchers Current Situation index rose from 47.8 to 50.4 points, and Eco Watchers Outlook strengthened from 50.1 to 50.3 points.

XAUUSD
Gold prices are recovering during the Asian session, retreating from the local lows of February 7, updated at the opening of Friday's trading. The growth of quotes is facilitated by technical correction factors, while the fundamental picture still supports the further strengthening of the US currency. US inflation statistics published in the past few days indicated that prices are still demonstrating an alarming increase, despite the passage of its peak. This may require the US Federal Reserve to strengthen measures aimed at curbing price growth, including through an increase in interest rates. The risks of a 75 basis point increase during the June meeting of the regulator are still quite low, but one should not forget that the US Federal Reserve has other leverage. In particular, the department may accelerate the launch of the quantitative tightening program.

SOLIDECN · May 20, 2022

EURUSD

The European currency is relatively stable against the US dollar during trading in the Asian session and is consolidating near local highs from May 5. The day before, the instrument showed active growth, which allowed leveling the results of Wednesday's "bearish" trend and brought the euro to a high at around 1.0600. EUR/USD was supported yesterday by expectations of the imminent end of quarantine due to the coronavirus in Shanghai, which will allow many enterprises to resume normal operation and have a positive effect on the dynamics of foreign trade. In turn, yesterday's macroeconomic data from the US put moderate pressure on the positions of the US currency. Initial Jobless Claims for the week ended May 13 increased from 197 thousand to 218 thousand, which was higher than market expectations by 18 thousand. Philadelphia Fed Manufacturing Index declined sharply in May from 17.6 to 2.6 points, while analysts expected the decline to only 16 points. The Minutes of the European Central Bank (ECB)'s meeting released the day before also contributed to the moderate growth of the single currency. In the report, the regulator pointed to the increasing risks associated with a sharp growth in inflation in the region, but at the same time maintained optimistic forecasts for both Q3 and Q4 of 2022. Also, many members of the ECB board are gradually speaking out in favor of tightening monetary policy. Analysts consider the rate hike at the end of summer or early autumn as most likely.

GBPUSD

The British pound is traded with mixed dynamics against the US currency during the morning session, consolidating near 1.2450. On Thursday, the pound showed active growth, which allowed it to fully recover from the decline last Wednesday. Moreover, GBP/USD briefly rose above 1.2500, having updated local highs from May 5. The growth of the instrument was facilitated by the weakening of the US currency, which came under pressure against the backdrop of weak macroeconomic statistics from the US. In addition, by the end of the week, corrective moods are intensifying. In turn, the fundamental picture on the market is changing slightly, and investors are still disappointed by the statistics released this week from the UK on the dynamics of consumer inflation. In April, the Consumer Price Index in annual terms accelerated from 7% to 9%, which fell short of the average market forecasts by only 0.1%. On a monthly basis, inflation in the UK also accelerated from 1.1% to 2.5%. Today traders are focused on British statistics on the dynamics of Retail Sales. At the moment, investors are taking a lead from the statistics on GfK Consumer Confidence. In May the index fell from -38 to -40 points against the forecast of -39 points.

AUDUSD

The Australian dollar is moderately declining against the US dollar during the Asian session, again testing 0.7000 for a breakdown. After active growth the day before, which allowed the instrument to renew local highs from May 9, corrective moods are again strong, and traders are in no hurry to open new purchases without the appearance of additional drivers. Also, the Australian dollar remains under moderate pressure after the publication of an ambiguous report on the labor market. The Employment Rate in Australia in April increased by only 4 thousand after an increase of 20.3 thousand in the previous month. Analysts were counting on an acceleration of positive dynamics to 30 thousand. The Full-Time Employment accelerated from 19.9 thousand to 92.4 thousand; however, a sharp reduction in Part-Time Employment by 88.4 thousand did not allow the final level to record a record growth. The Unemployment Rate remained at 3.9%, while the Participation Rate decreased slightly from 66.4% to 66.3%. The Australian dollar, in turn, is supported by upbeat news from China, where from June 1, the exhausting multi-week quarantine in Shanghai is expected to end, which significantly undermined the pace of Chinese economic recovery.

USDJPY

The US dollar shows mixed dynamics against the Japanese yen in Asian trading, consolidating near 127.70 and settling near the local lows of April 27. Demand for the yen is gradually increasing as interest in risk decreases; however, the dollar in this sense is also able to provide significant competition. Moreover, many investors prefer the American currency, since the difference between the interest rates of the US Federal Reserve and the Bank of Japan is high and will only increase in the future. In turn, inflationary risks in the two countries remain disproportionate. While the US regulator is extremely concerned about containing the growing price pressure, the Japanese one can afford to keep a wait-and-see attitude, managing only the quantitative easing program. Today's statistics on inflation in Japan reflected the increase in the National Consumer Price Index in April from 1.2% to 2.5%, which was significantly higher than market expectations at 1.5%. National CPI excluding Food and Energy in the country accelerated by 0.8%, while a month ago, analysts recorded its decline by 0.7%.

XAUUSD

Gold prices are consolidating after active growth the day before, which brought the instrument to new local highs from May 12. XAU/USD is testing 1840.00 for a breakout; however, the market activity remains quite low. The macroeconomic calendar on Friday is relatively empty, and therefore, significant changes in the dynamics of the instrument should not be expected. Experts attribute yesterday's growth in gold to the weakening of the dollar against the backdrop of the publication of disappointing macroeconomic statistics from the US. In particular, Initial Jobless Claims for the week ended May 13 increased from 197 thousand to 218 thousand. Philadelphia Fed Manufacturing Index fell from 17.6 to 2.6 points in May, with a slight correction forecast to 16 points. Existing Home Sales fell 2.4% in April, while investors expected a 0.7% decline.

SOLIDECN · May 23, 2022

EURUSD
The European currency starts the new week with moderate growth against the US dollar, again testing 1.0600 for a breakout and settling near the local highs updated last Thursday. Moderate support for the single currency at the beginning of the week is provided by the weakness of the US dollar, which came under pressure amid a noticeable correction in the yield of US Treasury bonds. Last Thursday, analysts recorded a decline in the yield of 10-year bonds to a three-week low of 2.77%, while earlier during the month the bonds showed a yield of 3.2%. In turn, pressure on the euro is exerted by the soft monetary policy of the European Central Bank (ECB), or rather the growing gap between the rates of the European regulator and the American one. Representatives of the ECB are beginning to speak out in favor of the idea of launching a rate hike program, but the official position of the Bank is still quite cautious. However, it is unlikely that the ECB will be able to remain on the sidelines for a long time, and the point here is not in the competition of rates or exchange rates. Inflation in the eurozone is growing at a record pace, and here the European regulator is at risk of following the path of the US Federal Reserve, which for a long time considered record price growth to be only a temporary phenomenon.

GBPUSD
The pound shows the uptrend in trading in tandem with the US currency during the morning session, testing the level of 1.255 for a breakout and updating local highs from May 5. The strengthening of the British currency at the beginning of the week is facilitated by the growth of corrective sentiment for the US dollar against the backdrop of a noticeable decrease in the yield of US Treasury bonds. Also, traders are still taking a lead from relatively optimistic macroeconomic statistics from the UK on Friday, which turned out to be significantly better than negative forecasts. In April, Retail Sales added 1.4% after falling by 1.2% a month earlier, although analysts had expected a decline of 0.2%. In annual terms, the indicator showed a sharp drop of 4.9% after increasing by 1.3% in March, while preliminary market estimates suggested a more active decline of 7.2%. Retail Sales excluding Fuel increased by 1.4% MoM, but decreased by 6.1% YoY, while the forecast was for a contraction of 0.2% MoM and 8.4% YoY. Today, statistics on housing prices in the UK were released. Rightmove House Price Index increased by 2.1% in monthly terms and by 10.2% in annual terms, which turned out to be slightly higher than the previous values at the levels of 1.6% MoM and 9.9% YoY.

NZDUSD
The New Zealand dollar is showing solid growth against the US dollar during the Asian session, building on the strong "bullish" momentum that was formed last week. NZDUSD is testing 0.6450 for a breakout, updating local highs from May 5. The instrument shows an uptrend against the backdrop of a correction in the US currency, which, in turn, reacts sharply to a decrease in the yield of US Treasury bonds. Also, the positions of the New Zealand dollar are strengthening on the news from Shanghai, where the authorities plan to lift the previously imposed quarantine restrictions from June 1. At the same time, the macroeconomic background from New Zealand remains rather neutral. Data released on Friday showed a slowdown in Credit Card Spending in April from 3.4% to 1.1%, which was worse than analysts' average forecasts of growth of 1.6%. Exports from New Zealand in April slightly decreased from 6.48 billion to 6.31 billion dollars, but against the backdrop of a sharper drop in imports from 7.06 billion to 5.73 billion dollars over the same period, the country's Trade Balance increased in April by 584 million after a decline of 581 million dollars a month earlier. Traders are waiting for the results of the meeting of the Reserve Bank of New Zealand (RBNZ), which will be announced on May 25, counting on another increase in interest rates by 50 basis points.

USDJPY
The US dollar is traded against the Japanese yen with a downtrend during the Asian session, once again testing the level of 127.50 for a breakdown. USD/JPY is located near the local lows of April 27, maintaining momentum for further development of the downtrend in the short term. The development of "bearish" trend is facilitated by corrective sentiment in the US currency, associated with a drop in the yield of US Treasury bonds. Investors also fear a further deterioration in inflation in the country, despite the fact that the latest data on consumer prices in the US reflected the possible passage of the peak of growth. One way or another, the policy of the US Federal Reserve has not changed much so far, and at its next meeting the regulator plans to raise the interest rate by another 50 basis points. In turn, the Bank of Japan maintains a wait-and-see attitude, preferring to limit itself to managing the quantitative easing program. Friday's statistics on inflation for April in Japan reflected the growth of the National Consumer Price Index by 2.5% after increasing by 1.2% a month earlier. Market forecasts assumed an increase of only 1.5%.

XAUUSD
Gold prices continue to show moderate growth at the beginning of the new week, updating local highs from May 12. The instrument is testing 1850 for a breakout, showing no clear signs of a weakening trend. The main factor in the growth of gold at the moment remains the weak dollar, which came under pressure after the publication of not the most optimistic macroeconomic statistics last week. In addition, investors are reacting negatively to the sharp decline in US Treasury yields. This week, market participants are waiting for the publication of the minutes of the last meeting of the US Federal Reserve, hoping to receive clear evidence of the continuation of the "hawkish" monetary policy. Also on Thursday, updated data on the dynamics of US GDP for Q1 2022 will be published. The previous estimate reflected the fall of the US economy by 1.4% in annual terms.

Market Review by Solid ECN

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