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HSBC Holdings (HSBA.L): First-quarter pre-tax profit was $9.4 billion; net interest income was $8.9 billion.Futures News, May 5th - According to foreign media reports, Malaysian palm oil futures rose for the second consecutive trading day, supported by a weaker ringgit and market optimism regarding Malaysias biodiesel program. However, declines in crude oil and soybean oil prices limited further upside. On the Bursa Malaysia Derivatives Exchange (BMD), the benchmark palm oil contract for July delivery steadily rose in early trading. In the crude oil market, prices, which had previously surged sharply, retreated significantly due to signs of potential easing in the situation regarding the blockade of key Middle Eastern waterways. The weakening of crude oil futures prices directly reduced the attractiveness of palm oil as a substitute for biodiesel feedstock.On May 5th, it was reported that Apple (AAPL.O) has held exploratory discussions with Intel and Samsung Electronics regarding the production of main processors for its devices. According to sources familiar with the matter, Apple has held initial talks with Intel about using the companys chip manufacturing services. Meanwhile, Apple executives have also visited a Samsung advanced chip factory under construction in Texas. The sources indicated that neither effort has yet generated any orders, and the collaboration with these two suppliers remains in its very early stages. The sources added that Apple has concerns about using technology outside of TSMC and may ultimately not actually partner with other companies. Spokespeople for Apple, Intel, Samsung, and TSMC declined to comment.Israel Defense Forces: In two separate incidents over the past few hours, Hezbollah fired several mortar shells at areas where the IDF is operating in southern Lebanon. No IDF personnel have been reported injured.On May 5th, State Street Global Advisors strategists stated in a report that gold prices are likely to rise as long as market consensus and the Federal Reserves forward guidance point to future easing policies. Currency markets and forex traders may be awaiting a viable (US-Iran) peace agreement to re-pricing in Fed rate cuts. They believe that gold can perform well even if the Fed keeps rates unchanged, provided forward guidance indicates an imminent rate cut. However, a continued hawkish shift in the monetary policy outlook could create headwinds for gold, at least in the short term. Furthermore, if oil prices remain at $100 per barrel, becoming the new normal, it could limit golds upward momentum towards $5,000 per ounce.

GBP/USD falls to around 1.2370 as the BoE considers taking swift action ahead of UK inflation and US purchasing managers' indices

Alina Haynes

Apr 17, 2023 13:53

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On Monday morning, the GBP/USD currency pair retested an intraday low of 1.2390 after extending Sunday's decline from a 10-month high. To provoke adverse after breaking a four-week uptrend, the Cable pair explains the most recent concerns emanating from the United Kingdom (UK) and the optimism surrounding the Federal Reserve (Fed).

 

According to the Financial Times (FT), "The Bank of England is considering a major overhaul of its deposit guarantee scheme, including increasing the amount covered for businesses and compelling banks to pre-fund the system to a greater extent to ensure faster access to cash when a lender collapses."  The revelation fuels banking concerns in the United Kingdom and places pressure on the Cable duo.

 

UK Chancellor Jeremy Hunt's concerns about US subsidies may also be exerting downward pressure on the GBP/USD exchange rate as British firms rush to claim benefits before leaving the country. According to the news, "Chancellor Jeremy Hunt warned Sky News that Britain should be wary of any new subsidies, warning that they could undermine the economy and possibly even spark a protectionist trade war."

 

A larger-than-expected decline in US retail sales was unable to offset positive data from US industrial production and the University of Michigan's (UoM) consumer confidence index from the previous day. Despite this, US retail sales decreased by 1.0% in March compared to the predicted -0.4% decline and February's -0.2% decline. As opposed to the 0.2% market consensus and previous reading, Industrial Production increased by 0.4% in the month in question. The preliminary result of the University of Michigan's (UoM) Consumer Confidence Index for April, which increased to 63.5 from 62.0 analysts' expectations and previous readings, was also encouraging. In addition, inflation forecasts for the next year increased from 3.6% in March to 4.6% in April, while inflation forecasts for the next five years decreased by 2.9% during the same month.

 

Notably, Fed officials have recently appeared more hawkish than their BoE counterparts, which has exerted additional pressure on the GBP/USD exchange rate.

 

In this environment, the S&P 500 Futures exhibit modest gains following Wall Street's pessimistic close, while bond yields remain unchanged following weekly increases.

 

Moving forward, the current week is crucial for GBP/USD speculators as it contains a variety of high-quality inflation, employment, and UK PMI data. These data may be used to support the Bank of England's (BoE) officials' waning hawkish inclination and may keep bears in play. However, the US PMIs and Fed discussions should not be disregarded when looking for clear guidelines.

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