Market Update – May 10 – Stocks Stabilize After Huge Risk-Off Monday

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USD cools from recent highs, Stocks stall their decline after Monday rout (NASDAQ -4.29%), Yields hold at highs with 10-yr over 3.00%. Gold and Oil both slumped as risk-off rattled markets CB tightening and rising inflation fears continuing to spook sentiment.  Asian markets weaker (Nikkei -1.00%) and European Futures all weaker.

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USDIndex tested new at highs at 104.20 yesterday back to 103.60 now.
EquitiesUSA500 -132 (-3.20%) at 3991, first close below 4k since March 2021. US500FUTS at 4022 now.
Yields moved higher, 10-yr closed at 3.079%, holding key 3.00% level.  Trades at 3.054% now  
Oil & Gold both had weak & volatile session –  USOil tested down to $100.00 before reversing to $102.20 now from opening trades over $109.00. Gold slumped from  $1885 zone to $1850 yesterday and struggles at $1860 now.
Bitcoin crashed through $30K struggling with $32K now.  
FX marketsEURUSD up from 1.0500 to 1.0560, USDJPY holds over 130.00, at  130.40 and Cable continues to struggle – 1.2260 lows were tested yesterday, back to  1.2325.   

Overnight Fed’s Kashkari : Reiterates confidence that inflation will return to Fed’s 2.0% target &  Fed’s Bostic: 50 bps hike was an aggressive move, Fed can stay at that pace, 75 bps rate hike is low probability.

Today – German ZEW, Speeches from Fed’s Williams, Waller, Bostic, Barkin, Kashkari, Mester, ECB’s de Guindos & BoE’s Saunders, Earnings from Bayer, Porsche, Norwegian Cruise Line & Warner Music.

Biggest FX Mover @ (06:30 GMT) AUDJPY (+0.35%) Rallied from lows at 89.70 to over 91.20 highs (resistance) today. MAs aligning higher, MACD signal line & histogram moving higher but remain weak, RSI 44, but rising, H1 ATR 0.33, Daily ATR 1.60.

¹https://finviz.com/

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Stuart Cowell

Head Market Analyst

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