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The Office of the United States Trade Representative announced that Brazilian aircraft and aircraft parts, rare earth elements, pesticides, pharmaceuticals, and fertilizers will be exempt from punitive tariffs.June 2nd - CNN reported on June 1st, citing a regional source familiar with the US-Iran negotiations, that talks have returned to normal. Iranian media had previously reported that negotiations between Iran and the United States had been suspended due to Israels continued attacks on Lebanon. However, US President Trump subsequently stated that he had spoken with Israel and that negotiations with Iran were "moving rapidly."Citigroup reiterated its expectation that the Reserve Bank of Australia will raise interest rates by 25 basis points at its August meeting.On June 2nd, the Beijing Municipal Tax Service announced the official launch of the nations first online tax refund shop for departing tourists in Beijing, along with the simultaneous opening of the first batch of centralized tax refund points for the hotel industry. Overseas tourists can now directly process tax refunds at their hotels after shopping online, further expanding the scope of tax refund services. Liu Li, Director of the Second Tax Branch of the Beijing Municipal Tax Service, State Taxation Administration, stated that the launch of the nations first online tax refund shop expands the tax refund scenario from offline physical stores to online shopping platforms, transforming policy benefits into tangible and accessible tax refund convenience for overseas travelers. Simultaneously, efforts are being accelerated to promote nationwide mutual recognition of "instant refund upon purchase," enabling overseas travelers to truly achieve "tax refunds nationwide even when departing from a different location."Futures News, June 2nd: As of June 1st, the mainstream closing price of benzene in East China was 7670 yuan/ton, up 30 yuan/ton from the previous trading day. Market news was quiet, and trading activity was moderate. The price fluctuation in the East China benzene market was limited throughout the day. Near-month prices remained relatively firm due to slow inventory reduction at major East China ports, while far-month prices remained weak. Maintenance shutdowns at Zhongjin Petrochemical and Hainan Refining & Chemical in early June, coupled with widespread losses among downstream users, dampened purchasing activity and continued to weigh on the market. However, with benzene valuations hitting new lows, cost support has strengthened somewhat. Expectations for a US-Iran agreement have dashed, leading to another surge in European and American crude oil futures. It is expected that benzene prices may rise slightly in the near term, supported by costs.

EUR/USD Expects Fourth Weekly Gains Above 1.0900 Despite The US Dollar's Rebound Advance Ahead Of US NFP

Daniel Rogers

Apr 07, 2023 11:42

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Despite a recent retreat, the EUR/USD bulls maintain control around 1.0920. This reflects the typical Good Friday inactivity and apprehension ahead of the US Nonfarm Payrolls (NFP) report released early in the day. The major currency pair was volatile on Thursday as a result of the US Dollar's initial rebound on fears of a recession, but ended the day unchanged as disappointing US data contrasted with stronger Eurozone data.

 

Fears of a recession in the world's largest economy were prompted by consecutive lackluster US data and falling US Treasury bond yields, giving USD bears a reprieve on Thursday morning. As traders prepared for the all-important NFP, the dollar's subsequent gains were reversed by another disappointing US employment report.

 

Despite this, US Initial Jobless Claims for the week ending March 31 rose to 228K from 200K anticipated and an upwardly revised 246K the prior week. Notable is the increase in Challenger Job Cuts from 77,77K to 89,703K in the given month.

 

Notably, Reuters fanned fears of a recession by citing the most recent decline in the preferred bond market indicator of Federal Reserve (Fed) Chairman Jerome Powell. The most reliable bond market indicator of an imminent economic contraction, according to Federal Reserve research, is the "near-term forward spread" between the forward rate on Treasury bills 18 months from now and the current yield on three-month Treasury bills.

 

According to Reuters, International Monetary Fund (IMF) Managing Director Kristalina Georgieva stated in prepared remarks on Thursday that the global economy is projected to expand by less than 3% in 2023, a decrease from 3.4% in 2022.

 

In other news, Germany's Industrial Production (IP) increased 0.6% year-over-year in February, versus market predictions of -2.7% and previous readings of -1.7%. Additionally, the monthly figures exceeded expectations by 0.1%, coming in at 2.0% compared to 3.7% previously. On Wednesday, Germany Factory Orders for February improved to -5.7% YoY from -12.0% previously revised down and -10.5% market expectations, while MoM growth came in at 4.8% compared to 0.3% expected and 0.5% previous readings.

 

Wall Street and US Treasury bond yields have both reduced weekly losses as a result of these strategies, but investors remain skeptical.

 

In the context of less liquidity surrounding the March US employment report, sporadic activity on the major markets can keep the EUR/USD inactive and prone to abrupt price swings. Notable is the fact that recent dovish Fed forecasts and disappointing US data generate expectations for a positive surprise and enormous price volatility thereafter.


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