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U.S. Dollar's Deja Vu

Dean Popplewell profile picture
Dean Popplewell

Thursday, May 3: Five things the markets are talking about

Global equities saw some pressure overnight as the market now shifts their focus away from the Fed and back to corporate earnings season and Sino/U.S. trade talks.

Most G10 currency pairs have found firmer footing temporarily against the dollar, while the yield on U.S. 10-year Treasuries fluctuated, trading within reach of its recent highs.

Today sees the start of trade talks between the U.S. and China and the markets are cautiously awaiting the outcome. Recent rhetoric suggests that both sides have dialled back their expectations on the outcome.

Note: The U.S. has even suggested they could leave earlier if there is no traction in negotiations.

There were no surprises that the Fed kept rates on hold yesterday, a June hike is 100% priced in by Fed fund futures. U.S. policy makers admitted that inflation is "near target" without suggesting any need to accelerate its 'gradual hiking path.'

Elsewhere, oil swung between gains and losses as traders weighed a rise in stockpiles against concern about U.S. sanctions on Iran.

On tap: U.S. payroll is expected to have picked up stateside tomorrow (08:30 am EDT), with the unemployment rate expected to fall to +4%.

1. Stocks under pressure

Stocks in Europe and Asia mostly edged lower overnight following declines in the U.S. Wednesday, as investors analysed the latest signals from the Fed and a new slate of earnings reports.

Note: Japanese markets will be closed on Thursday and Friday for public holidays.

Down Under, Aussie equities were noted outperformers as rising commodities prices helped the index get close to its best level of the year. Australia's S&P ASX added +0.8%.

In Hong Kong, the Hang Seng Index fell -1.3%, led lower by tech and real estate companies. Concerns about fresh U.S. sanctions against Chinese telecom-equipment makers as

This article was written by

Dean Popplewell profile picture
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.

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