Mon, May 29, 2023 @ 01:43 GMT
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Renewed Market Optimism Captures Investors’ Attention

Investors enjoyed a rather optimistic session on Tuesday as hopes over a softer impact by the Omicron variant seem to surge within the media. Even though the impact of the new variant may require months to be fully investigated and determined, market participants tend to believe circumstances remain pretty much the same. Most of traders’ confidence on Tuesday was displayed through the major US stock markets that were unanimously in green territory. All three major stock markets, the S&P500, the Nasdaq100 and the Dow Jones made notable movements to the upside gaining back most of the ground lost in the previous daily sessions.

However, on a more cautious note it should be noted that, as we are going through the final weeks of the current year, the markets may experience temporary abrupt or even exaggerated movements. Among the top stock gainers on Tuesday from our point of view was GlaxoSmithKline (#GSK) and its partner Vir Biotechnology Inc. that stood out as they stated that their new Sotrovimab Covid-19 antibody treatment is effective against the Omicron variant. More investigation maybe required as the treatment is still in the early stages of its laboratory studies. However, the results so far seem to be in favour of the treatment working against the variant. As the market is currently overflowing on information over the new variant GlaxoSmithKline’s share price may continue to rise.

CAD in focus as BOC’s Interest rate decision is expected

The star financial release for Wednesday is the Bank of Canadas’ interest rate decision. The bank is widely expected to remain on hold at 0.25% and currently CAD OIS imply a 100% possibility for such a scenario to materialize. At the moment, the Canadian economy continues to display strength with the most recent employment report for November released during the previous Friday, showed the Unemployment rate dropping from previous 6.7% to 6.0% and the Employment change figure jumping from previous 31.2K to the impressive 153.7K. USD/CAD found itself in the downfall for the second consecutive day on Tuesday performing a considerable move to the downside. The CAD’s dominance against the USD in the most recent daily sessions could be an indication that the market is preparing for the BOC’s rate decision as well as its accompanying statement. All eyes will be fixed on BOC on Wednesday as the Employment market and Inflation data point to a strong position for the Canadian economy possibly granting for change of the central banks stance in the near future. On a separate note, the central bank’s views on the ongoing pandemic and its impact on the Oil market can move traders interest towards the commodity’s market. Oil price’s moved higher in the past daily sessions but have not rebounded since the most recent selloff during late November.

Today’s events and expectations

Today we note the two speakers from the ECB as a start. First ECB Vice President De Guindos in the European morning and ECB Board member Schnabel in the early US session. In the main US session we get BOC’s interest rate decision while at the same time we receive the US JOLTS Job Opening for October and the weekly EIA Crude Stock piles. On Thursday early morning session we get a speech by RBA governor Lowe in the early Asian session. Later on the Chinese PPI and CPI rates for November will be released.

US30Cash H4 Chart

Support: 35600 (S1), 35285 (S2), 34955 (S3)

Resistance: 35880 (R1), 36180 (R2), 36570 (R3)

USD/CAD H4 Chart

Support: 1.2595 (S1), 1.2545 (S2), 1.2490 (S3)

Resistance: 1.2670 (R1), 1.2735 (R2), 1.2830 (R3)


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