• How hawkish will the ECB be today?
• A potential dollar tailwind that traders should not overlook
• First Horizon, TD decide to call off merger pact
• Eurozone April final services PMI 56.2 vs 56.6 prelim
• Germany March trade balance €16.7 billion vs €16.1 billion expected
• Eurozone March PPI -1.6% vs -1.7% m/m expected
• UK March mortgage approvals 52.01k vs 46.25k expected
• UK April final services PMI 55.9 vs 54.9 prelim
• US April Challenger layoffs 66.99k vs 89.70k prior

Markets:

• NZD leads, CHF lags on the day
• European equities lower; S&P 500 futures down 0.3%
• US 10-year yields up 1.3 bps to 3.354%
• Gold up 0.2% to $2,042.41
• WTI crude down 0.1% to $68.50
• Bitcoin up 2.1% to $29,142

It was a tedious session as markets are balancing out having to digest the Fed decision yesterday while preparing for the ECB decision to come later.

On the balance of things, we are still seeing some degree of risk aversion with equities keeping lower and bond yields in general staying subdued after yesterday’s fall. The dollar held weaker early on but found some footing in European morning trade, and is now only marginally lower after having pared gains earlier.

EUR/USD is up 0.1% to 1.1070 but saw a bit of a swing around 1.1040 to 1.1080 during the day while USD/JPY is down 0.2% to 134.35 though it was up around 134.65 earlier in the session.

The kiwi is leading the way with NZD/USD up 0.7% to 0.6270 though it is running close to its 100-day moving average at 0.6277 currently.

As we move towards the end of the week, all eyes are now on the ECB and then we’ll have to see how US regional banks fare as the dust settles following the Fed.

This article was written by Justin Low at www.forexlive.com.

• Prior 89.70k

That now makes it ten months in a row that job cuts have come in higher relative to the same month a year ago but the jumps since December last year have been particularly notable. We already saw the highest number of Q1 layoffs since 2020 and this pretty much reaffirms that trend.

This article was written by Justin Low at www.forexlive.com.

• S&P 500 futures -0.4%
• Nasdaq futures flat
• Dow futures -0.4%
• Eurostoxx -0.9%
• Germany DAX -0.8%
• France CAC 40 -0.9%
• UK FTSE -0.8%

Markets are still digesting the Fed decision from yesterday but it doesn’t seem to be giving much reprieve to stocks for now. The heavy-looking bond yields today are also not helping to divert from the risk aversion mood as well.

The question now is, will the dollar be able to find some bids if market sentiment sours further? Or if we will see it slump amid a test of key technical levels outlined here.

This article was written by Justin Low at www.forexlive.com.

On the daily chart below for WTI crude
oil, we can see that after the surprise OPEC+ cut and a mini rally to the top
of the range at $83, the market saw an incredibly fast selloff. The bullish
case is the tight supply and underinvestment, but the demand side of the
equation is definitely leading, and it’s connected to a deteriorating global
economy.

The global central banks
tightening amid high inflation is dampening demand and it’s aimed precisely at
that. The recent weaker US labour market data has also played a big role and
the regional banking crisis is not helping either. It looks like the bearish
trend will continue until the central banks start easing but until then we may
see even lower prices.

WTI
Crude Oil technical analysis

On the 4 hour chart below, we can
see how the upper bound of the range acted as the top and then the third
rejection from the downward trendline was the last attempt by the
bulls to rally. After that we saw a big selloff with almost no pullbacks.
Tonight, we also saw a flash crash that was erased soon after once the price
bounced from the $64 low. The price is now overstretched, and we should see a
bigger pullback probably towards the $72 zone before the next big move.

On the 1 hour chart below, we can
see that a good level for the sellers would be the 61.8% Fibonacci
retracement level which is just beneath the bottom of the
broken range. Further downside is unlikely from here unless more regional banks
fail and the US labour market data miss expectations. Today we have the Jobless Claims
report and tomorrow the NFP. Watch out for these data points as they will cause
big moves in the markets.

This article was written by ForexLive at www.forexlive.com.

Doesn’t
matter what your choice is – McDonald’s breakfast menu or lactose-free porridge
with granola and peanut butter. Anyway, you can’t ignore the fact that
McDonald’s is a phenomenon in the fast-food universe as well as in the stock
market. And despite the crisis and general situation in the world, the company
has presented financial reports with more impressive numbers than analysts had
expected. So, what’s next? Let’s try to investigate if McDonald’s still has
room for growth.

Since
the beginning of the year, McDonald’s stock has increased by almost 10%. As you
can see in the chart below, the shares have outperformed the S&P 500 and
Dow Jones indices.

You
could argue that there is not a large gap after a third of a year. That’s why
we prepared one more chart – it shows what has been going on with the same
symbols in the last five years. The picture below looks like a comparison
between a McFlurry and cheap supermarket ice cream. Also, you should know that
there are various factors which might influence the stock price. Some of them
are pretty unpredictable but lots of future market movements can be forecast
using a variety of trading tools. One of them is economic
calendar – it warns you about all upcoming major economic
events.

McDonald’s
has dropped its Q1 report suggesting that the company might continue its
positive movement. Earnings per share and revenue results beat analyst
expectations – $2.63 against $2.33 and $5.9 bln against $5.59 bln. Moreover,
net income and sales have grown as well.

However,
McDonald’s raised prices on the menu in the past year and crises around the world are influencing the
amount of spare cash people have. But the last thing might be even positive in
this case. The reason is – doesn’t matter if there’s a crisis or not – people
love cheap eats, and McDonald’s is the place to go for that.

Also,
the company reduced various costs recently – a large number of employees were
dismissed, and some offices were closed. This is one more positive factor for
McDonald’s balance between income and expenses. Such optimization gives an
opportunity to spend more money on business development and enlargement of
delivery capabilities.

And we
shouldn’t forget about the Chinese market. After the county eased off the Covid
restrictions, McDonald’s can count on increased profits in the region.

Though,
you shouldn’t look at the perspectives of McDonald’s shares only through
rose-colored glasses. Current market conditions present challenges for
businesses. Layoffs and shutting down the offices show that the situation in
the company is far from cloudless. Moreover, you should remember that if the
stock market goes down, MCD will probably do the same.

But
analysts continue to believe in McDonald’s shares. The consensus forecast is
+9% in the next 12 months. It might not be too impressive, but the forecast
says that the shares may be a good addition to the portfolio. But it’s just a
prediction, and it can be changed in a week or even tomorrow. That’s why before
buying (or selling) these stocks, you need to do your own analysis – only after
that, can you make an informed decision.

This article was written by ForexLive at www.forexlive.com.