2023-04-24 18:11:15
The dollar starts the week with a downward trend and closes below $4,500a figure that had not been seen for more than a week, since for five days the currency had shown a slight rebound, surpassing said barrier.
The currency surprised once more and closed at $4,482.06, which positioned it $41.58 below the Representative Market Ratewhich for today was at $4,523.64.
For closing, the currency registered minimums of $4,451.30 and maximums of $4,514.90. In addition, US$872.4 million was traded in 1,481 transactions.
According to Bloomberg, markets in the US struggled to gain traction at the start of a week packed with corporate earnings reports and economic data that may help light the way for interest rates.
Contracts for the S&P 500 and Nasdaq 100 were little changed following a quiet end to trading last week. The Coca Cola Co. gained following strong out-of-home sales boosted first-quarter revenue. Treasury yields fell and a gauge of the dollar held steady.
Leveraged investors drove net short positions in 10-year Treasury futures to a record this month, data from the Commodity Futures Trading Commission shows. That is an indication that they believe the Federal Reserve will continue to raise rates to deal with inflation.
This week’s earnings from big tech, among others, will be scrutinized for insights into the effect of higher borrowing costs and a struggling economy.
“Earnings estimates for the second half of the year in the US remain overly optimistic; we still see a mild recession ahead,” Laura Cooper, a senior investor strategist at BlackRock International Ltd., told Bloomberg TV.
“So we’re really more selective in our equity space, and more importantly, earnings will provide some guidance on direction going forward and that might tilt the view a bit,” Cooper concluded.
Swap markets continue to see Fed rates peak in the coming weeks ahead of a series of rate cuts later this year. US GDP data is forecast to reveal a slowdown in growth, while the so-called core PCE deflator, the central bank’s preferred inflation gauge, is expected to show a cooling in price growth.
“We should take the Fed at face value when it says rates are not going to go down this year,” Kieran Calder, head of Asia equity research at Union Bancaire Privée in Singapore, told Bloomberg Television. “Inflation, especially core inflation, continues to be very difficult,” he added.
Petroleum
The barrel of Brent oil, a reference for Colombiarises 1.49% to US$82.88, while WTI does 1.44% trading at US$78.99.
Oil prices were stable on Monday as concerns regarding rising interest rates, the global economy and the outlook for fuel demand balanced out with the prospect of a reduction in supply.
Both contracts fell more than 5% last weekposting its first weekly declines in five years, as implicit demand for gasoline in the United States fell from a year earlier.
The market expects the central banks of the United States, the United Kingdom and Europe to raise interest rates when they meet in the first week of Mayin order to cope with persistently high inflation.
China’s rocky economic recovery from the COVID-19 pandemic also clouded the outlook for oil demandalthough Chinese customs data showed on Friday that the world’s top importer of crude entered record volumes in March.
However, analysts and traders remain optimistic regarding a recovery in Chinese fuel demand towards the second half of 2023 and possible supply shortages due to further supply cuts expected by the OPEC+ producer group from May.
“The production cuts planned by the OPEC+ alliance and the good prospects for Chinese demand might boost prices in the coming daysSugandha Sachdeva, an independent oil analyst, told Archyde.com.
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