Market Drivers; US Session, March 28

Mohamed Abdelhamid 29 March, 2024 2:20 am Commodities, Forex Market, Market Update

Due to hawkish comments made by Fed member Waller, which implied that the US central bank would maintain rates at their present, restrictive levels for an extended period of time, the US dollar strengthened on Thursday. Bond rates for the near term rose, and the stock markets continued their upward trend.

Member of the ECB Board Fabio Panetta reaffirmed that the Euro Zone’s price stability concerns are decreasing, which is putting the groundwork for beginning to loosen monetary policy. A number of ECB representatives who support President Christine Lagarde have made references to a rate reduction in June.

Economic Data

Overall, US data was upbeat. The Gross Domestic Product (GDP) final estimate for the fourth quarter was increased upward from the prior estimate of 3.2% to 3.4%.

The nation also announced the Initial Jobless Claims data for the week ending March 22, and the results were better than expected, coming in at 210K. Lastly, Pending Home Sales increased 1.6% MoM in February, exceeding forecasts, and the March Michigan Consumer Sentiment Index was upwardly revised to 79.4, significantly better than the earlier estimate of 76.5.

Key Developments

Despite the Easter holiday, most markets will be closed on Friday. However, Japanese marketplaces will be open as usual. The core Personal Consumption Expenditures (PCE) Price Index, the Fed’s preferred measure of inflation, is set to be released in the US later today and is predicted to stay steady at 2.8% YoY.

One of the poorest performing currencies was the euro, with EUR/USD closing below the 1.0800 mark. With the confirmation of the Gross Domestic Product at -0.2% YoY in the final quarter of 2023, the GBP/USD pair concluded the day with slight losses.

Commodity-linked currencies exhibit uneven trading patterns. While the USD/CAD fell near 1.3520, aided by the strong performance of stock markets, the AUD/USD posted a mild dip and settled around 0.6514 amid mediocre Australian data.

Commodities

Gold was the best performer, and flirts with record highs, with XAU/USD trading around $2,220. WTI has increased by 14% since the year’s beginning and hit $82 a barrel earlier this week. At the beginning of the year, Brent oil was trading for about $78 per barrel; this week, it is trading for over $86.

On Thursday, the benchmark U.S. crude oil for May delivery increased by $1.82 to $83.17 a barrel. A barrel of Brent crude for May delivery increased by $1.39 to $87.48.

At $2.76 per gallon, wholesale petrol for April delivery increased by 8 cents. The price per gallon of heating oil increased by 2 cents in April. Natural gas prices increased by 4 cents to $1.76 per 1,000 cubic feet in May.

An ounce of gold for delivery in April now costs $2,217.40, up $26.80. May copper increased by 1 cent to $4.01 per pound, while silver for May delivery increased by 17 cents to $24.92 per ounce.

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