• NASDAQ rises by 2.25%.Dow industrial average has its best day since January 6.
• More from Bullard: Ready to be data dependent with an open mind on whether to pause
• Baker Hughes oil rig count -3 at 588
• Fed’s Bullard: Thought quarter point hike this week was a good step
• President Biden: Debt ceiling and budget are totally unrelated
• European major indices enjoy solid gains to close the trading week
• CNBC: White House is considering the possibility of a shorter-term debt ceiling extension
• Deutsche Bank says it’s time to take proftis on EUR/USD bets
• ECB’s Muller: The ECB most consider the impact of lagged impact
• Wholesale US used-vehicle prices drop in April in Manheim index
• Gold fails at the top of the range again
• Canada April employment 41.4K versus 20.0K estimate
• US April non-farm payrolls +253K vs +180K expected
• Forexlive European FX news wrap 5 May – NFP won’t let me be.
• The AUD is the strongest and the CHF is the weakest as the NA session begins
• Global equity funds see biggest weekly outflow in five weeks
• SNB’s Chairman Jordan: We cannot exclude further tightening of monetary policy.

It was unemployment day and the data was mixed despite the higher than expected gains of 253K for the current week. The month gain was comfortably higher than the 180K estimate. However, job growth has moderated after including the revised figures for its February and March figures. Those revisions lowered the two months by 149K, taking the average monthly job gains over the past three months to 222,000, compared to 524,000 a year ago. The average is the lowest since January 2021.

On the strong side was the unemployment rate which dipped to 3.4% from 3.5%, matching its multi-decade low, while average hourly earnings rose more than anticipated, up 4.4% from a year earlier and 0.5% MoM (vs 0.3% estimate). Higher labor costs could lead to inflationary pressure and clearly, the unemployment rate at multi-decade lows also has the potential to increase inflation if those costs are passed on the the consumer. Drilling into the major employment sectors:

• Professional and business services: Employment in this sector continued to trend up, adding 43,000 jobs in April. Professional, scientific, and technical services saw an increase of 45,000 jobs, while temporary help services continued to trend down, losing 23,000 jobs.
• Health care: The sector added 40,000 jobs in April, with employment trending up in ambulatory health care services (+24,000), nursing and residential care facilities (+9,000), and hospitals (+7,000).

• Leisure and hospitality: Employment in this sector continued to trend up, adding 31,000 jobs in April, mainly in food services and drinking places (+25,000).

• Social assistance: The sector added 25,000 jobs in April, with individual and family services contributing 21,000 jobs.

• Financial activities: Employment increased by 23,000 in April, with gains in insurance carriers and related activities (+15,000) and real estate (+9,000).

• Government: Employment continued its upward trend, adding 23,000 jobs in April.

• Mining, quarrying, and oil and gas extraction: The sector added 6,000 jobs in April, mainly in support activities for mining.

Employment in other major industries, such as construction (+15K), manufacturing (+11K), wholesale trade, retail trade, transportation and warehousing (-2.2K), information (+1K), and other services (+0.5K), remained largely unchanged in April. Goods producing jobs added 33K versus -17K last month, while services added 197K versus 140K last month

Job growth needs to moderate further for the Federal Reserve to stop worrying about inflation problems. The central bank has signaled that it will likely hold off on raising rates when it convenes next month, providing some breathing room to assess the labor market’s progress. Despite challenges stemming from the Fed’s rate-hiking campaign and turmoil in the banking sector, hopes remain for a smooth transition of the job market back to pre-pandemic norms.

St. Louis Fed President James Bullard was the first Fed member since the Fed hiked rates by 25 basis points on Wednesday and post the US jobs report to speak. Bullard is considered more of a hawk, but has softened up a bit lately. Bullard believes that the recent quarter-point rate hike is a good step, moving the Fed above 5%, but acknowledges that there is still a lot of inflation in the economy. He does not see a recession as the base case, but rather slow growth and declining inflation. With today’s stronger-than-expected jobs report, Bullard notes that the labor market is tight and will take time to cool. He thinks regional banks will do just fine despite some issues, and that the Fed can still achieve a soft landing. The recent drop in market interest rates may be overshadowing the impact of credit tightening from bank stress, but Bullard believes its ultimate impact on the economy will be small. He warns that Wall Street may be unprepared if inflation persists and the Fed has to do more with rates. The current policy is at the low end of the restrictive zone, and Bullard suggests that the Fed may have to „grind higher“ on rates due to a slower decline in inflation. He remains data-dependent and open-minded about the June meeting, calling the recent jobs report „impressive“ but highlighting that there’s still a long way to reach balance in the labor market.The comment that he is still confident of a soft landing caught the stock market’s attention and helped to extend gains toward new extremes. The Dow had its biggest day since early January. The NASDAQ index closed within a few points of its highs from 2023. The S&P had its 4th largest percentage gain of the year. All 3 indices snapped 4-day losing streaks to start the month of May:

The final numbers are showing:

• Dow industrial average increased 546.64 points or 1.65%. For the trading week the index fell -1.24%
• S&P index rose 75.03 points or 1.85%. For the week, the index fell -0.80%
• NASDAQ index rose 269 points or 2.25%. The index for the week rose 0.07%

In other markets

• Gold fell $-33.95 or -1.66% at 2015.94. For the trading week gold rose 1.32% despite the sharp declines today as it reacted to the banking concerns and lower rates earlier this week. Today, both regional bank stocks and US rates rose.
• Silver fell $-0.37 or -1.43% at $25.64. Silver rose 2.42% this week.
• WTI crude oil rose $2.76 or 4.03% to $71.32. Crude oil fell -7.09% on global growth concerns despite the sharp rise today. Yesterday the price fell to the lowest level since December 2, 2021 when it reached $63.65, but bounced back quickly
• Bitcoin is marginally higher at $29,541.

In the Forex market today, the AUD is ending as the strongest followed by the CAD. Both were helped by risk-on sentiment. The CHF and JPY were the weakest as the flight into the relative safety of those currencies was reduced.

This article was written by Greg Michalowski at www.forexlive.com.

The major US indices are closing sharply higher with the NASDAQ index leading the way. A Goldilocks scenario where the growth can continue with hopefully lower inflation help contribute to the buying across the board. The Dow industrial average had its best day since January 6. The S&P index has 4th best percentage gain this year. The NASDAQ index rose 2.25% and traded to the highest level since February 2 (the high price for 2023

The final numbers are showing:

• Dow industrial average rose 546.75 points or 1.65% at 33674.39
• S&P index rose 75.05 points or 1.85% at 4136.28
• NASDAQ index rose 269 points or 2.25% at 12235.40

The Russell 2000 index, small caps rose 41.06.2 or 2.39% at 1759.87. There was a large gain since January 31 when the index rose 2.45%

For the trading week,

• Dow Industrial Average fell -1.24%
• S&P index fell -0.80%
• NASDAQ index closed marginally higher by 0.07%
• Russell 2000 fell -0.51%

upon answer earnings after the close yesterday and its shares rose $7.83 or 4.72% today. Nvidia moved back to the upside with a 4.06% gain. Microsoft gained 1.72%, Adobe rose 3.77% and Tesla gained 5.51%. Disney rose 3.15% and Shake Shack rose 6.51% adding to their sharp gains yesterday after better-than-expected earnings (up 19.65% for the week). Shopify also announced earnings and rose 8.25% today, and 28.03% this week. The Ark Innovation Fund rose 4.62%

On the downside Meta fell -0.32% and Intel fell -0.80%.

This article was written by Greg Michalowski at www.forexlive.com.

The GBPUSD has reached the high today of 1.2652. The current price is trading at 1.2642. At the high, the price got closer to its swing high going back to May 8, 2022 near 1.2665. A move above that level would have traders targeting this 61.8% retracement at 1.27605.

On the downside, traders will be watching the low of the swing area near 1.25987 as close support.

Buyers are making a play into resistance. You have to go through resistance to get extend higher, but it may also slow the rally or bring in traders against that area, with a stop above (risk is limited).

Looking at the hourly chart, the price action was very volatile today with the initial move to the upside leading to a sharper move to the downside and then a snapback rally back higher.

So what now?

In addition to support at 1.25987 from the daily chart, the swing high from last Friday at 1.25829 and the 38.2% retracement of the move up from this week’s low at 1.25689 are the downside targets.

This article was written by Greg Michalowski at www.forexlive.com.

Headlines:

• 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.

Headlines:

• All eyes on the Fed as regional banks come under fire
• Dollar loses some ground to start European morning trade
• Oil tumbles further, $70 within reach
• RBA’s Kohler says have some confidence that goods inflation will moderate this year
• US MBA mortgage applications w.e. 28 April -1.2% vs +3.7% prior
• Eurozone March unemployment rate 6.5% vs 6.6% expected

Markets:

• JPY leads, USD lags on the day
• European equities slightly higher; S&P 500 futures up 0.2%
• US 10-year yields down 3.4 bps to 3.405%
• Gold flat at $2,015.63
• WTI crude down 2.9% to $69.59
• Bitcoin down 0.4% to $28,574

The tension is building as we gear towards the Fed policy decision later today, after US regional banks were hammered in trading yesterday. While there is a calmer mood in equities, let’s not forget that was also the case yesterday all before it turned sour when Wall Street entered the fray.

The bond market continues to hint at caution as Treasury yields remain heavy and that is weighing further on USD/JPY, as the pair is down from 136.00 to 135.50 during European morning trade.

The dollar was rather subdued as it was offered across the board during the session. EUR/USD moved up from 1.1010 to 1.1040 while GBP/USD moved up from 1.2480 to 1.2530 before settling closer to 1.2500 now.

There is a bit of a mixed mood in markets, as oil is also seen slumping hard as global growth worries continue to weigh. WTI crude is down by nearly 3% in a fall back under $70 – the first time in over five weeks.

And despite that, USD/CAD is seen keeping closer to flat levels around 1.3620 as the dollar is struggling to capitalise on the day.

It’s now over to the Fed to see what comes next on the week.

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

The Kremlin itself has responded by saying that „we consider it an attempt on Putin’s life“ and that „we reserve the right to respond when and however we see fit“. Adding that there were two drones used in the attempted attack and that Putin had not been injured.

There are vides circulating around social media showing smoke from the Kremlin at night. But make what you will of it and we shall see how Ukraine responds to this later today.

JUST IN – Russia says Ukraine tried to hit Kremlin with drones overnight in an assassination attempt on Putin.pic.twitter.com/xAS0BtTDzs

— Disclose.tv (@disclosetv) May 3, 2023

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