Shelling in Russia’s Bryansk region hits parts of oil terminal – Russian news agencies

Russian air defences prevented a Ukrainian aircraft from entering the Bryansk region on Saturday, Russian news outlets reported citing the region’s governor, adding that as a result shelling hit parts of an oil terminal and adjacent territory.

Russian air defences prevented a Ukrainian aircraft from entering the Bryansk region on Saturday, Russian news outlets reported citing the region’s governor, adding that as a result shelling hit parts of an oil terminal and adjacent territory.

“There are no victims,” RIA news agency cited the governor, Alexander Bogomaz, as saying. He added that a logistics building at the terminal was damaged.

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Eurozone Economy Grew 0.2% in 1Q; France Stagnates, Germany Avoids Recession

The Eurozone economy grew by 0.2% in the first three months of the year, but its post-pandemic growth weakened sharply toward the end of the period under pressure from the war in Ukraine and record-high inflation.

Eurostat's figures, released on Friday, mean that gross domestic product was up 5.0% from a year earlier, a time when the region's economy was still laboring under the worst of the effects from the pandemic. 

Both figures were largely in line with expectations, but masked some big divergences from consensus among some of the region's biggest member states. French GDP undershot expectations to stagnate in the quarter, while German GDP rose 0.2%, defying fears that it would register a second straight quarter of negative growth, thanks to strong investment spending.

At the same time, Eurostat said that inflation in the Eurozone hit a new record high since the creation of the single currency. Consumer prices rose 7.5% in April, up from 7.4% in March. While the slower rise in the headline rate suggests that an absolute peak for inflation may be near, underlying price pressures remained strong: core CPI rose by over 1% for the second month running, and Eurostat's harmonized measure of annual inflation excluding food and energy accelerated far more than forecast to 3.9% from 3.2% last month.

The euro rose by around half a cent against the dollar in the course of the morning as national GDP data were published in advance of the Eurozone numbers. By 5:20 AM ET (0920 GMT), it was at $1.0576, up 0.8% on the day. A bounce in Chinese assets in response to promises of more economic policy support from Beijing had also helped sentiment toward the euro and to risk assets more broadly.

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GBP/JPY eases from daily high, still well bid around mid-163.00s amid the post-BoJ JPY selloff

The post-BoJ selling around the JPY provided strong boost to GBP/JPY on Thursday.

The risk-on impulse was seen as another factor that weighed on the safe-haven JPY.

Extremely overstretched conditions provided respite to the JPY and capped gains.

The GBP/JPY cross trimmed a part of its strong intraday gains to the three-day high and retreated below mid-163.00s during the first half of the European session.

The cross built on the previous day's goodish rebound from the 159.60 area, or the monthly low and caught aggressive bids on Thursday in reaction to a dovish Bank of Japan statement. As was expected, the Japanese central bank stuck to its ultra-loose policy setting and vowed to conduct daily operations to defend its “near-zero” target for 10-year bond yields.

In the post-meeting press conference, the BoJ Governor Haruhiko Kuroda said that risks to the economy are skewed to the downside for the time being and showed readiness to ease policy further if necessary. Apart from this, the risk-on impulse - as depicted by strong move up in the equity markets - weighed on the safe-haven Japanese yen and acted as a tailwind for the GBP/JPY cross.

That said, extremely overstretched conditions offered some support to the JPY amid speculations that the recent freefall in the domestic currency could trigger verbal intervention. Apart from this, the relentless US dollar buying weighed on the British pound. The combination of factors attracted some selling around the GBP/JPY cross and led to a sharp intraday pullback of nearly 100 pips.

In the absence of any major market-moving economic releases from the UK, the sentiment surrounding the Japanese currency will continue to play a key role in influencing the GBP/JPY cross. Traders will further take cues from the broader market risk sentiment to grab some short-term opportunities.

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Dollar Gains to Two-Year High on Safe Haven Flows

The U.S. dollar posted further gains in early European trade Wednesday, trading at two-year highs on safe haven flows as traders digested slowing global growth, raised geopolitical tensions, and the prospect of more tightening by the Federal Reserve.

At 3:15 AM ET (0715 GMT), the Dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.2% higher at 102.532, the strongest it has been since March 2020 and on course for its best month since 2015.

Russia announced plans to halt gas flows to Poland and Bulgaria from Wednesday amid a standoff over fuel payments, to the benefit of the safe haven dollar.

Russian President Vladimir Putin has decreed that payment from “unfriendly” buyers should be in rubles, helping support his country’s beleaguered currency, while the European Union has responded that would be a breach of sanctions.

This escalation of tensions has added to the reasons traders have chosen to hold the dollar, with strict COVID-19 lockdown in China likely to hit economic growth in the world’s second largest economy while the Federal Reserve is expected to hike interest rates by 50 basis points in May as it seeks to combat inflation at a four-decade high.

EUR/USD fell 0.2% to 1.0618, dropping to a five-year low, amid fears for Europe's energy security, while the weak GfK German consumer confidence index, projected to plunge to a historic low in May, also weighed.

“April has been nasty for the euro, falling over 300 points. The Ukraine war and the hawkish Fed have been a toxic mix for the euro, as investors have dumped the currency and flocked to the safe-haven U.S. dollar,” said Kenny Fisher, an analyst at brokerage OANDA.

USD/JPY rose 0.5% to 127.81, not far removed from its recent 20-year low with the Bank of Japan set to meet overnight.

This central bank has maintained a very accommodative monetary stance, in direct contrast to the hawkish Federal Reserve, but traders see the risk of policy changes to try and arrest the currency's recent weakness.

GBP/USD edged higher to 1.2577, falling to a fresh 21-month low as last week’s weak retail sales data prompted a rethink of the Bank of England’s tightening cycle.

“Tightening expectations for the 5 May BoE meeting have dropped backed to 29bp from 38bp early last week,” said analysts at ING, in a note.

USD/CNY edged lower to 6.5555, with the yuan helped by data showing Chinese industrial profit growth quickened in March, while AUD/USD rose 0.5% to 0.7159 after Australian consumer prices surged at their fastest annual pace in two decades, spurring rate hike speculation.

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Gold Price Forecast: Battle lines well-mapped for XAUUSD ahead of key event risks – Confluence Detector

Gold Price consolidates the rebound, not out of the woods yet.

Markets remain risk-averse amid Beijing lockdown fears, Fed rate hikes.

US dollar index closes in on 102.00, holds near two-year highs.

Nothing much has changed fundamentally for Gold Price over the past 24 hours, although bulls are seeing some temporary reprieve. The bearish potential remains intact for XAUUSD, as the US dollar holds near two-year highs vs. its main rivals. Markets remain cautious and prefer to seek refuge in the US currency amid rising worries over the Fed’s aggressive tightening stance and Beijing's covid lockdown, which may temper the global economic recovery. Traders now await the US economic releases for fresh dollar valuations, eventually impacting Gold Price.

Gold Price: Key levels to watch

The Technical Confluences Detector shows that Gold Price is stuck in a narrow range despite the rebound, as the pivot point one-week S1 at $1,906 limits the immediate upside.

If that level is scaled, then bulls need to yield a decisive break above $1,909, the confluence of the Fibonacci 38.2% one-day and the previous high four-hour.

The next stop for XAUUSD bulls is envisioned at the SMA10 four-hour at $1,911. Further up, the convergence of the Fibonacci 61.8% one-day and SMA200 15-minutes at $1,918 will be eyed. 

On the downside, $1,900 acts as powerful support, where the Bollinger Band one-day Lower lies.

Should bears take out that downside cap, then a retest of the daily lows at $1,896 will be inevitable.

The previous day’s low of $1,892 will be next on the sellers’ radars. The line in the sand for Gold buyers is the previous month’s low at $1,890.

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Silver Price Analysis: XAG/USD slumps into mid-$23.00s amid broad commodity sell-off

Silver has slumped towards $23.50 this Monday amid a broader sell-off in risk assets and commodities and as USD strengthens.

Now XAG/USD is below its 200DMA, bears are eyeing an eventual drop towards Q4 2021 lows in the $21.00s.

Spot silver (XAG/USD) prices came under heavy selling pressure on Monday in tandem with a broader downturn in the market’s appetite for risk and downside in other key commodities such as across energy and metals. Traders cited risk aversion relating to the increased risk of lockdowns in China with a Covid-19 outbreak now reported in Beijing, continued pessimism about the prospects for a peace deal in the Russo-Ukraine war and, perhaps most importantly, recent hawkish chatter from central bank policymakers.

Either way, XAG/USD was last trading down nearly 2.5% on the day just above the $23.50 per troy ounce mark, having broken below key resistance in the form of the 200-Day Moving Average at $23.85 and the March lows at $23.97. That means spot silver prices are trading at their lowest since mid-February, prior to the start of Russia’s invasion of Ukraine, with a modest downturn in global yields on the day as a result of risk aversion likely the only thing stopping silver crashing further towards $23.00.

But the bears will be confident in wake of the recent breakout below the 200DMA, with many calling for a drop towards support in the form of the Q4 2021 lows in the $21.00s in the coming weeks as the US dollar continues to rise on hawkish Fed sentiment and risk-off flows. The key risk events for traders to monitor this week include the first estimate of US Q1 GDP growth on Thursday followed by March Core PCE inflation on Friday, with the latter likely to endorse Fed plans/market expectations for a 50 bps rate hike at next week’s meeting.

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Russia's Putin: Kyiv showing not ready to seek mutually acceptable solutions

Russian President Vladimir Putin held a call with European Council President Charles Michel earlier on Friday and, according to Russian news agency Tass (cited by Reuters).

Putin reportedly told Michel that the possibility of him holding direct talks with Ukrainian President Volodymyr Zelenskyy depends on concrete results of talks between the two sides' negotiating teams. Kyiv is showing it is not ready to seek a mutually acceptable solution, Putin told Michel. 

Michel on Wednesday visited Kyiv and pledged that the EU will give a further EUR 1.5B in military aid to Ukraine. 

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EUR/USD Price Analysis: Next target appears at 1.1000

EUR/USD extends the rebound to the 1.0940 region.

A move to the 1.1000 hurdle should not be ruled out.

EUR/USD’s upside momentum picks up extra pace beyond the 1.0900 yardstick on Thursday.

Further advance appears in store for the pair in the very near term with the immediate hurdle now at the psychological 1.0000 barrier. The surpass of the latter should put a test of the 55-day SMA, today at 1.1077, back on the radar.

While below the 200-day SMA, today at 1.1415, the outlook for the pair is expected to remain negative.

EUR/USD daily chart

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Yen to snap record losing streak on intervention worries; euro jumps

The Japanese yen briefly fell to a fresh two-decade low on Wednesday after the Bank of Japan stepped into the market again to defend its ultra-low interest-rate policy, drawing a sharp contrast with the United States where bond yields hit new highs.

But the Japanese unit bounced in London trading as increased nervousness around verbal intervention and growing speculation around an impending bilateral meeting between U.S. Treasury Secretary Yellen and her Japanese counterpart prompted traders to trim some short bets.

Still, positioning in the derivatives and currency futures suggest the yen weakness has more room to run.

The BOJ again offered to buy unlimited amounts of Japanese government bonds to check the rise in Japanese 10-year yields, which were butting against its 0.25% tolerance ceiling.

In contrast, Treasury yields marched to three-year highs while inflation-adjusted bond yields hit positive territory for the first time since March 2020 as hawkish comments by policymakers reinforced expectations of aggressive U.S. interest rate hikes.

The U.S. dollar reached 129.43 yen for the first time since April 2002 in Asian trading before easing to last trade 0.9% lower at 127.82.

"The 130 is a psychological level; if we break it (likely) then momentum will likely drive USDJPY even higher," said Vasileios Gkionakis, EMEA head of FX G10 Strategy at Citibank.

"This is a play on monetary policy divergence with the Fed in tightening mode and the BoJ still easing."

The dollar's rally against the yen has come as U.S. Treasury yields pushed higher, with 10-year yields touching 2.981% for the first time since December 2018 in Tokyo trading. Inflation-adjusted U.S. 10-year yields hit 0% overnight.

"The yen remains the loser of the monetary policy normalisation," Commerzbank (ETR:CBKG) strategists said.

Elsewhere, the euro was the other big gainer in London after media reports that some ECB policymakers were forecasting a first rate hike as early as July. The single currency was up as much as 0.6% at $1.0853.

The dollar index, which measures the currency against six major peers including the yen, early in the day matched Tuesday's high at 101.03 - a level not seen since March 2020 - before easing to 100.38, down 0.6% in the day.

An index of currency market volatility firmed above 8% but still well below 2022 highs of 10% hit in March.

The offshore Chinese currency was the other big loser with the unit declining 0.4% to 6.44 yuan per dollar.

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Gold Price Forecast: XAU/USD remains on the defensive amid faster Fed hike views

A combination of diverging forces failed to provide any impetus to gold on Tuesday.

The Fed’s hawkish outlook, sustained USD buying continued acting as a headwind.

The Ukraine crisis, growth/inflation concerns helped limit the downside for the metal.

Gold witnessed subdued/range-bound price action on Tuesday and remained confined in a narrow trading band, below the $1,980 level through the first half of the European session. Growing market acceptance that the Fed would tighten its monetary policy at a faster pace to curb soaring inflation acted as a headwind for the non-yielding yellow metal. Apart from this, the unstoppable rally in the USD/JPY pair is bolstering the US dollar bid at the expense of the dollar-denominated commodity.

All eyes on the Fed and US dollar

More hawkish comments from Federal Reserve officials have reinforced expectations for faster US policy tightening. They started to flow in from New York Fed President John Williams who said last week that a half-point rate rise next month was "a very reasonable option," in a further sign that even more cautious policymakers are on board with faster monetary tightening.

Meanwhile, Fed member James Bullard spoke on Monday and offered further insight on the outlook for Fed policy. Bullard is one of the bank's most hawkish and has called for interest rates to reach 3.0% this year.

US inflation is "far too high," he said on Monday, repeating his case for increasing interest rates to 3.5% by the end of the year to rein in inflation expectations and slow what are now 40-year-high inflation readings.

"What we need to do right now is get expeditiously to neutral and then go from there," Bullard said at a virtual event held by the Council on Foreign Relations, adding that he doesn't expect to need to raise rates by more than half a percentage point at any meeting.

He said that the Unemployment Rate can continue to fall even with aggressive rate hikes, repeating his view that unemployment, now at 3.6%, will go below 3% this year.

This all comes ahead of the Fed Chair Jerome Powell later this week, where he is expected to solidify expectations for a 50 bps rate hike at the coming Fed policy meeting.

As a consequence of such sentiment, the US rate futures market has priced in a 96% chance of a 50 basis-point tightening at next month's Fed policy meeting, and about 215 basis points in cumulative rate increases in 2022, providing ample support for the dollar.

As for positioning, speculators' net long bets on the US dollar fell for a second straight week, according to calculations by Reuters and US Commodity Futures Trading Commission data released on Friday. The value of the net long dollar position was $13.22 billion for the week ended April 12.

The downside, however, remains cushioned amid the retreat in the US Treasury yields from the multi-year highs. Apart from this, a generally weaker tone around the equity markets was seen as another factor that extended some support to the safe-haven gold. The COVID-19 lockdowns in China, a protracted Russia-Ukraine war, along with a potential European Union (EU) embargo on Russian gas have intensified inflation and growth concerns. This was seen as another factor that benefitted the metal's appeal as a hedge against rising costs. That said,  the sentiment will be driven by the Fed’s expectations amid absent relevant market moving economic releases from the US.

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 Saudi Feb crude exports hit near two-year high

Saudi Arabia's crude exports in February rose to 7.307 million barrels per day (bpd), the highest level since April 2020, official data showed on Monday.

Crude oil exports in February rose 4.4% from about 7 million bpd reported for January.

The world's largest oil exporter's February crude production also rose to its highest level in nearly two years at 10.225 million bpd from 10.145 million bpd in the previous month.

Saudi Arabia's domestic crude refinery throughput fell 0.271 million bpd to 2.506 million bpd in February while direct crude burn fell 111,000 bpd to 291,000 bpd.

Monthly export figures are provided by Riyadh and other members of the Organization of the Petroleum Exporting Countries (OPEC) to the Joint Organizations Data Initiative (JODI), which published them on its website.

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Gold Price Forecast: XAUUSD aims $2,000 amid a solid rebound to near $1,960, yields surge

Gold Price may face various headwinds as the expectations of the Fed's tightening bets elevated.

The 10-year US Treasury yield trims Wednesday’s losses and approaches the 2.80% threshold.

Gold Price could be on the way to a test of the 38.2% and 61.8% ratios near $1,950 and $1,930.

Gold (XAU/USD) witnessed a strong rebound in the late New York session from around $1,961.00 following a minor correction in the US dollar Index (DXY). Investors preferred the precious metal for parking their funds amid a long weekend due to the Easter holiday. It says that the Tough gets going but the journey of recapturing the crucial figure of $2,000 will be filled with difficulties.

The US Treasury yields have recovered from their losses recorded in the last two trading sessions on the optimism of an aggressive tight policy by the Federal Reserve (Fed) in May. The 10-year US Treasury yields have reclaimed their three-year high at 2.83% after the Bank of Canada (BOC) and Reserve Bank of New Zealand (RBNZ) hiked their critical policy rates by 50 basis points (bps). Elevation in policy rates by worldwide central banks raised hopes of mean reversion to neutral rates sooner rather than later. It is worth saying that the campaigning for higher interest rates will also be followed by the Fed in its May monetary policy, and in anticipation of that yields may remain underpinned while the gold prices will face headwinds.

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EUR/USD Price Analysis: Extra pullbacks seen below 1.080

EUR/USD fades the pre-ECB uptick to the 1.0920 zone on Thursday.

Recent lows around 1.0800 emerge as the next contention area.

In light of the ongoing price action, extra losses in the pair remain in the pipeline in the short-term horizon. Against that, a break below the so far monthly low at 1.0808 (April 14 should pave the way for a quick visit to the 2022 low at 1.0805 (March 7) before the May 2020 low at 1.0766 (May 7).

While below the 200-day SMA, today at 1.1440, the outlook for the pair is expected to remain negative. 

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GBP/JPY sticks to strong gains near two-and-half-week high, around 164.00 mark

GBP/JPY regained traction on Wednesday and was supported by a combination of factors.

Dovish remarks by BoJ’s Kuroda and the risk-on impulse weighed on the safe-haven JPY.

Hot UK consumer inflation figures underpinned sterling and provided an additional boost.

The GBP/JPY cross maintained its strong bid tone through the first half of the European session and was last seen trading near a two-and-half-week high, around the 164.00 mark.

Following the previous day's modest pullback, the GBP/JPY cross caught fresh bids on Wednesday and was supported by a combination of factors. The Japanese yen weakened across the board after the Bank of Japan Governor Haruhiko Kuroda reiterated to sustain the current powerful monetary easing to support economic recovery. Apart from this, the risk-on impulse - as depicted by a positive tone around the equity markets - undermined traditional safe-haven assets, including the JPY.

On the other hand, the British pound drew some support from hotter-than-expected UK consumer inflation figures. In fact, the UK Office for National Statistics reported that headline CPI jumped from 6.2% YoY in the previous month to 7% in March - the highest level since 1992. Adding to this, the Core CPI, which excludes volatile food and energy prices, rose to 5.7% YoY from the 5.2% reported in February. This was seen as another factor that provided an additional lift to the GBP/JPY cross.

With the latest leg up, spot prices have rallied nearly 150 pips from the weekly low, around the 161.60 region touched on Monday. Expectations that the BoJ will stick to its accommodative monetary policy stance should continue to act as a headwind for the JPY and supports prospects for a further near-term appreciating move for the GBP/JPY cross. Hence, a subsequent move back towards challenging the multi-year high, around the 164.65 region touched in March, remains a distinct possibility.

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 Gold Price Forecast: $1,960 could cap XAU/USD ahead of US CPI

Gold struggled to capitalize on its early uptick and attracted some selling around the $1,960 region on Tuesday. The pullback extended through the first half of the European session and dragged spot gold further away from the four-week high touched the previous day. The prospects for a faster policy tightening by the Fed pushed the US Treasury bond yields to a fresh multi-year peak and acted as a headwind for the non-yielding yellow metal. That said, concerns that the war in Ukraine and tough new COVID-19 restrictions in China could hit global growth could limit losses for the safe-haven XAU/USD. Apart from this, worries that the recent surge in commodity prices would put upward pressure on already high consumer prices could further benefit the metal's appeal as a hedge against inflation. Hence, the market focus will remain on the US CPI report, scheduled for release later during the early North American session.

Gold: Key levels to watch

The Technical Confluences Detector shows that any subsequent slide is likely to attract some buying near the $1,952-51 region - the Fibonacci 61.8% one day. The next relevant support is pegged near the $1,941 area - the Fibonacci 23.6% one week - ahead of the $1,937 zone, marking the 5-day SMA. A convincing break below could negate prospects for any further near-term appreciating move and drag spot gold to the $1,921-$1,919 intermediate support en-route the $1,900 round-figure mark.

On the flip side, the $1,960 region now seems to have emerged as an immediate strong barrier. The said resistance is the convergence of the Fibonacci 38.2% one day, Pivot Point one week R1, Bollinger Band one-day Upper and the Fibonacci 61.8% one month. Sustained strength beyond would be seen as a fresh trigger for bullish traders and pave the way for a move back towards the $2,000 psychological mark.

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Silver Price Analysis: XAG/USD rallies into the low $25.00s amid safe-haven bid, despite higher yields

Silver has seen a decent push higher on Monday amid geopolitical/China lockdown worries, shrugging off the headwind of higher yields.

XAG/USD has rallied back to near $25.20, up over 40 cents, and is eyeing late March highs at $25.85.

Fed speak and US inflation will be in focus this week and could test bullish conviction.

Risk-off trade in global equities as markets fret about recent news regarding the Russo-Ukraine war and the risk of a further widening of lockdowns in China has offset the negative impact of a continued sharp rise in global yields on precious metals markets. Indeed, though US 10-year yields have rallied a further 3-4bps to a fresh multi-year high above 2.75%, thus increasing the opportunity cost of holding non-yielding assets (like precious metals), spot silver (XAG/USD) trades with impressive on the day gains of more than 1.7%.

XAG/USD has rallied more than 40 cents from opening levels near $24.75 to current levels around $25.20 and, in doing so, broken to the north of its 21-Day Moving Average at $24.92. Technical buying on the break above a downtrend that had been in play since early March certainly seems to have helped. Bulls will now be eyeing a test of late March highs at $25.85 ahead of a potential run towards last month’s highs near $27.00.

But the silver bulls won’t be declaring victory for the week just yet, given a plethora of key upcoming risk events. A barrage of Fed policymakers will be speaking in the coming days (with a total of four appearing on Monday alone) and are likely to reiterate recent hawkish messages. But the main event(s) of the week will be the release of US Consumer and Producer Price Inflation data on Tuesday and Wednesday which, if they surprise to the upside, could exert even more pressure on the Fed to be hawkish.

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Dollar riding high after index hits 100 for first time in nearly two years

The U.S. dollar index strengthened to 100 for the first time in nearly two years on Friday, supported by the prospect of a more aggressive pace of Federal Reserve interest rate hikes.

The greenback has gained ground on a basket of rivals over the past month, particularly against the euro, which has been pressured by investor concerns about the economic costs of war in Ukraine and a potentially nail-biting election in France.

The dollar index rose as high as 100 in early European trading hours, its best level since May 2020. It later lost some momentum and was last broadly flat at 99.844.

The index is up 1.3% this week, which would be its biggest increase in a month, backed by hawkish remarks from several Federal Reserve policy makers who are calling for a faster pace of interest rate increases to curb rapid inflation.

This week's release of the minutes of the Fed's March meeting showed "many" participants were prepared to raise interest rates in 50-basis-point increments in coming months.

On the other side of the dollar's rally, the euro dropped to a new one-month low of $1.0848. It later recovered and was last broadly flat on the day at $1.08770.

Meeting minutes from the European Central Bank published on Thursday suggested its policy makers are keen to act to combat inflation, but the eurozone has so far taken a more cautious tack than other central banks, weakening the euro.

A tightening election race in France between president Emmanuel Macron and far-right candidate Marine Le Pen has added to pressure on the euro, raising investor concerns about the future direction of the euro zone's second-biggest economy, though Macron is still ahead in polls.

"The upcoming French presidential election, with the first round on Sunday, is also adding to current negative EUR sentiment," currency analysts at MUFG said in a note.

The dollar extended its gains against the Japanese yen, hitting 124.23, its highest in over a week and approaching last month's near seven-year high of 125.1.

The yen has steadied this month after tumbling in March, but remains under pressure as the U.S. raises interest rates and the Bank of Japan intervenes in the bond market to keep rates low.

Sterling lost ground versus the dollar, and was last down a quarter of a percent at $1.30400.

In cryptocurrency markets, bitcoin was broadly unchanged at $43,430.

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GBP/JPY consolidates in a range around 162.00 mark, downside remains cushioned

GBP/JPY struggled to capitalize on its modest intraday gains back closer to over a one-week high.

The cautious market mood underpinned the safe-haven JPY and capped the upside for the cross.

Subdued USD demand benefitted the GBP and extended some support, at least for the time being.

The GBP/JPY cross surrendered its modest intraday gains and was last seen trading in the neutral territory, around the 161.80-161.75 region.

The cross attracted some dip-buying near the 161.40 area on Thursday and climbed back closer to over a one-week high touched the previous day, though the uptick lacked bullish conviction. The European equity markets recovered from the overnight selloff, which undermined the safe-haven Japanese yen and extended some support to the GBP/JPY cross.

Apart from this, comments from Bank of Japan board member Asahi Noguchi, saying that the central bank must stick to its ultra-easy policy despite rising inflationary pressures, also weighed on the JPY. On the other hand, some cross-driven strength stemming from the fall in the EUR/GBP cross benefitted sterling amid subdued US dollar price action.

The combination of factors did provide an intraday lift to the GBP/JPY cross, through the prevalent cautious market mood kept a lid on any meaningful upside, at least for the time being. The market sentiment remains fragile amid fading hopes for a diplomatic solution to end the war in Ukraine and the prospect of more Western sanctions on Russia.

Hence, the focus will remain on new developments surrounding the Russia-Ukraine saga amid absent relevant market moving economic releases from the UK on Thursday. The incoming geopolitical headlines would influence the risk sentiment, which, in turn, will drive demand for safe-haven assets, including the JPY, and provide impetus to the GBP/JPY cross.

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 European Stocks Lower; More Russian Sanctions, Aggressive Fed Weigh

European stock markets traded lower Wednesday, weighed by the likely imposition of new Western sanctions on Russia as well as concerns of aggressive monetary tightening by the U.S. Federal Reserve.

By 3:40 AM ET (0740 GMT), the DAX in Germany traded 0.5% lower, the CAC 40 in France fell 0.5% while U.K.’s FTSE 100 dropped 0.1%.

The United States and Europe are set to announce later Wednesday new sanctions to punish Moscow over alleged atrocities in Ukraine, something Ukraine President Volodymyr Zelensky described as "war crimes" in a speech to the United Nations security council.

The European Commission has already proposed new sanctions including banning Russian coal imports and halting trade worth nearly 20 billion euros ($22 billion), and the White House said late Tuesday that its new measures will target Russian banks and officials and ban investment in Russia.

Russia’s invasion of Ukraine and the sanctions already levied by the West as punishment have roiled markets, causing sharp rises in commodity prices, prompting fears of sharply slower growth this year. 

German factory orders fell 2.2% on the month in February in the runup to Russia’s invasion of Ukraine, falling for the first time in four months and underscoring concerns over weaker growth in Europe’s largest economy. 

Also, dragging on the European markets are set to receive a negative handover from Asia and Wall Street after comments from Fed Governor Lael Brainard raised expectations of aggressive interest rate rises by the U.S. central bank, added to by hawkish comments from Fed Governor Lael Brainard, normally seen as one of the more dovish members of the central bank policymakers.

This puts the focus firmly on the release later Wednesday of minutes from the Fed's last policy meeting, with investors looking for clues over the likelihood of a 50 basis point hike at the U.S. central bank's next meeting in May.

In corporate news, Volkswagen (DE:VOWG_p) stock fell 2.7% after the German carmaker’s finance chief Arno Antlitz told the Financial Times that the company is likely to ditch many models by the end of the decade to concentrate on producing fewer cars overall but more profitable premium vehicles.

Vestas Wind Systems (CSE:VWS) stock fell 1.4% after the Danish wind turbine said that it would withdraw from Russia, where the firm has two factories.

Oil prices edged higher Wednesday, with traders having to balance supply concerns on the back of likely new sanctions on Russia with fears of weaker demand after a build in U.S. crude inventories and a prolonged COVID lockdown in Shanghai, the Chinese financial hub.

U.S. crude oil supply data from the industry body American Petroleum Institute, released late Tuesday, showed a build of just over 1 million barrels for last week, compared with the 3-million-barrel draw reported the previous week.

Investors now await official numbers from the U.S. Energy Information Administration later in the session for confirmation.

By 3:40 AM ET, U.S. crude futures traded 0.9% higher at $102.86 a barrel, while the Brent contract rose 1% to $107.67. 

Additionally, gold futures fell 0.4% to $1,919.50/oz, while EUR/USD traded 0.1% lower at 1.0891.

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Silver Price Analysis: XAG/USD sticks to gains near $24.60-65 area, bearish bias remains

Silver gained some positive traction on Tuesday and snapped three days of the losing streak.

The mixed technical setup warrants some caution before positioning for any further upside.

Sustained move beyond the $25.00 mark is needed to support any near-term positive bias.

Silver built on the overnight bounce from the $24.30-$24.25 region and gained some positive traction on Tuesday, snapping three successive days of the losing streak to a four-day low. The white metal held on to its modest gains through the first half of the European session and was last seen trading around the $24.65-$24.70 zone.

From a technical perspective, the XAG/USD once again showed some resilience below the 50% Fibonacci retracement level of the $22.00-$26.95 move up. The subsequent move up supports prospects for some additional intraday gains, though neutral technical indicators on the daily chart warrants caution for aggressive bullish traders.

Hence, any further positive move might continue to confront stiff resistance and remain capped near the 38.2% Fibo. level, around the $25.00 psychological mark. A convincing breakthrough the said handle has the potential to lift the XAG/USD towards the $25.35-$25.40 intermediate hurdle, en-route the 23.6% Fibo., around the $25.75-$25.80 area.

On the flip side, weakness below the mid-$24.00 mark, or the 50% Fibo. level now seems to find some support near the overnight swing low, around the $24.30-$24.25 region. Some follow-through selling would make the XAG/USD vulnerable to accelerate the slide towards retesting sub-$24.00 levels, or the one-month low touched in March.

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 Oil rises to $105 as supply fears perist despite reserves release

LONDON (Reuters) -Oil rose to $105 a barrel on Monday in volatile trade as the release of strategic reserves by consuming nations failed to eliminate supply fears arising from Russia's invasion of Ukraine and the lack of an Iranian nuclear deal.

The invasion in February heightened supply concerns that were already underpinning prices. Sanctions imposed on Russia and buyers' avoidance of Russian oil have already led to a drop in output and raised fears of larger losses. [IEA/M]

"Will the release of barrels from strategic reserves fill a shortfall caused by sanctions and buyer aversion to Russian oil? In a word, no," said Stephen Brennock of oil broker PVM.

Brent crude was up 92 cents, or 0.9%, at $105.31 a barrel by 1140 GMT. U.S. West Texas Intermediate crude gained 63 cents, or 0.6%, to $99.90. Both contracts were down more than $1 earlier in the session.

Crude dropped by about 13% last week after U.S. President Joe Biden announced a record U.S. oil reserves release and as International Energy Agency members committed to further tapping reserves. Crude had hit $139 last month, its highest since 2008.

"The massive release of 1 million barrels per day over a period of six months in the United States alone is likely to ensure that the oil market is no longer acutely undersupplied in the second and third quarters," Commerzbank (DE:CBKG)'s Carsten Fritsch wrote in a report.

Oil also gained support from a pause in talks to revive the Iran nuclear deal, which would allow a lifting of sanctions on Iranian oil. Iran on Monday blamed the United States for the halt.

Downward pressure came from a truce in Yemen, which could ease threats to supply in the Middle East.

The United Nations has brokered a two-month truce between a Saudi-led coalition and the Houthi group aligned with Iran for the first time in the seven-year conflict. Saudi oil facilities have come under Houthi attack during the fighting.

WTI falls back under $100 with Russo-Ukraine peace talk optimism, crude oil reserve releases in focus

Oil was trading with a bearish bias on Friday amid Russo-Ukraine peace talk optimism and crude oil reserve release focus. 

WTI dipped below $100 per barrel and hit fresh weekly lows sub-$98.00, with bears eyeing March lows in the $93.00s.

Oil prices have continued to trade with a bearish bias on Friday, with front-month WTI futures dipping to fresh weekly lows under $98.00 as traders digest the recent announcement of a major crude oil reserve release in the US (1M barrels per day for six months) and a further tightening of lockdown measures in major Chinese economic zone Shanghai. Recent positive commentary from Russian Foreign Minister Sergey Lavrov regarding progress in Russo-Ukraine peace talks is also weighing on oil as geopolitical risk premia is further unwound. Having found resistance at its 21-Day Moving Average (DMA) in the $108 area earlier in the week, WTI is now probing its 50DMA to the downside in $98.00s.

International Energy Agency member nations recently commenced a meeting and the speculation is that other major oil consumer nations might also announce crude oil reserve releases alongside the US. US President Joe Biden said this could amount to a further 30-50M barrels of immediate supply. If confirmed, further newsflow pertaining to crude oil reserve releases could inject further bearishness into crude oil markets, with a test of March lows in the $93.00s on the cards.

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