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1. Shipping traffic in the Strait of Hormuz was nearly empty on Thursday, with commercial shipping companies remaining on high alert due to concerns about a renewed escalation of military conflict. 2. Chinas crude stainless steel production reached 3.7174 million tons in April 2026, a 1.25% increase compared to March 2026. 3. U.S. durable goods orders rose 7.9% in April, easily surpassing the Wall Street Journals market consensus forecast of 3.5%. The second estimate of first-quarter GDP growth was unexpectedly revised downward, from 2% to 1.6%. 4. Initial jobless claims in the U.S. rose by 5,000 in the week ending May 23, bringing the total to 215,000, according to data released by the Labor Department on Thursday. 5. Driven by rising energy prices due to the Iran war, U.S. inflation in April saw its fastest pace in three years, further reinforcing economists view that the Federal Reserve is likely to keep interest rates unchanged for a considerable period until next year. 6. The National Development and Reform Commission convened a national video conference on energy supply during the peak summer season of 2026. The conference emphasized the need to ensure the safe and stable operation of energy resources during this period, including stable power generation and supply. It stressed the importance of ensuring the production and supply of primary energy sources such as coal and natural gas, strengthening coal transportation guarantees, and meeting peak power generation demands. It also called for continued efforts to efficiently fulfill long-term contracts for electricity, coal, and natural gas. 7. According to the China Securities Journal, Zimbabwe has officially designated 14 minerals, including lithium, nickel, cobalt, and graphite, as "critical minerals" subject to equity and export controls, and established the principle of mandatory minimum shareholding through designated special purpose vehicles (SPVs). A representative from China Mineral Resources responded, stating, "After verification with Zimbabwean authorities, the minimum shareholding ratio is merely the personal opinion of the Zimbabwean Minister of Mines and Mineral Development. No policy has been issued, it does not represent the governments position, and currently has no impact on the company. Even if this direction is followed in the future, the policy will only affect the construction of new mines, and will have no impact on the operation of existing mines." 8. According to two US officials speaking to Axios, US and Iranian negotiators have reached an agreement on a 60-day memorandum of understanding aimed at extending the ceasefire and initiating negotiations on Irans nuclear program; however, Trump has not yet given final approval. 9. EIA Natural Gas Report: As of the week ending May 22, total US natural gas inventories were 2.483 trillion cubic feet, an increase of 92 billion cubic feet from the previous week and 21 billion cubic feet from the same period last year, a year-on-year increase of 0.9%, while being 144 billion cubic feet higher than the 5-year average, an increase of 6.2%.The U.S. Treasury Department said it has removed 76 names from its sanctions blacklist in an effort to increase focus on high-risk targets.Federal Reserves Mussalem: The risks are currently more tilted toward the inflation side.Federal Reserves Mussalim: If these scenarios do occur and inflation declines, interest rate cuts could be considered.Federal Reserve Chairman Mussaleam: We may also see a slowdown in economic growth in the second half of the year.

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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