Forex News Timeline

As the global economy gradually overcomes the pandemic, except for India and Japan, Bloomberg came out with the report suggesting China’s coronavirus (COVID-19) vaccine from the Sinovac Biotech Ltd. as highly effective in the real-world study. The report cites research on the Indonesian health workers and found over 96% got protected from hospitalization due to the jabbing. “Indonesia tracked 25,374 health workers in capital city Jakarta for 28 days after they received their second dose and found that the vaccine protected 100% of them from death and 96% from hospitalization as soon as seven days after, said Health Minister Budi Gunadi Sadikin in an interview on Tuesday. The workers were tracked until late February,” said Bloomberg. Earlier Brazil was spotted cheering the Chinese vaccine while Chile criticized the pandemic’s cure. Elsewhere, the US Centers for Disease Control and Prevention (CDC) found 23 blood clotting issues linked to the Johnson & Johnson inoculation while saying, “the benefits of the Johnson & Johnson vaccine outweigh the risks.” It's worth mentioning that Brazil suspended the use of the AstraZeneca vaccine in pregnant women while Pfizer-BioNTech gets multiple orders from the Eurozone of late. FX implications Although the news should have ideally favored the market sentiment, the pre-US CPI caution seems to weigh on the mood. Read: AUD/USD: Wavers above 0.7800 amid cautious sentiment on US Inflation day

Amid the escalating tensions in the Middle East, especially between Israel and Palestine, the members of the United Nations (UN) held a secret meeting by late Tuesday. Following the discussion, UN Special Envoy to the Middle East Peace Process Tor Wennesland said, per local media, "Stop the fire immediately. We’re escalating towards a full-scale war. Leaders on all sides have to take the responsibility of de-escalation." The UN diplomat also urged that the the cost of war in Gaza is devastating & is being paid by ordinary people. Market implications The news offers a helping hand to the oil prices that are already on the front foot around $65.50 amid the early Wednesday morning in Asia. However, cautious sentiment ahead of the key US inflation data keeps the commodity bulls pressured. Read: WTI: Firmer around mid-$65.00s despite softer draw in API oil inventories

WTI stays on the front foot inside $65.25-50 trading range.API Weekly Crude Oil Stock eased from -7.688M to -2.533M for the week ended on May 07.Colonial Pipeline stays on the course to restore supplies before weekend, OPEC raised demand outlook.Oil markets turn sluggish ahead of US inflation, official stockpile data and UN meeting on Middle East tensions.WTI ends Tuesday with the heaviest gains in a week, up 0.80% around $65.45, as oil traders cheered US dollar weakness. Also on the positive side was the ongoing absence of supplies from the Colonial Pipeline and the US government’s rejection to use emergency measures to balance the energy markets. In doing so, the bulls ignored the weekly inventory data from the American Petroleum Institute (API). The industry report showed that the weekly crude oil stock dropped 2.533 million barrels versus the previous draw of 7.688 million barrels. The US dollar index (DXY) remained pressured, dropped to the fresh low since late February, amid market fears ahead of the key Consumer Price Index (CPI) data. Given the lack of tuning between the market’s reflation fears and the Fed’s defense to the easy money policies, today’s US inflation figures will be watched to confirm whether it’s a one-time affair or a real challenge to the US Federal Reserve (Fed). Read: US Consumer Price Index April Preview: The two base effects of inflation It’s worth mentioning that the Wall Street benchmarks also portrayed the risk-off mood, backed by the sustained downtrend in the technology shares. Other than the market sentiment and the US dollar moves, the ongoing meeting among the United Nations (UN) members and the Colonial Pipeline outage keeps WTI buyers hopeful. Also supporting the oil bulls was the Organization of the Petroleum Exporting Countries (OPEC) oil forecasts. The oil cartel left its expectations for 2021 world oil demand growth unchanged at 5.95 million barrels per day (bpd), as reported by Reuters, in its monthly report. Looking forward, the official stockpile report by the Energy Information Administration (EIA), expected -2.25M versus -7.99M, will be important. However, nothing more crucial than the US inflation data for April, expected to pick up to 3.6% YoY versus 2.6% prior. Technical analysis A six-week-old rising trend channel keeps WTI buyers hopeful until the quote stays above $63.00 on a daily closing basis.  

AUD/USD picks up bids inside a recent 20-pip trading range.Traders turn cautious ahead of the key US inflation data.Aussie budget forecasts no inflation problem until 2022-23, upbeat data from US, China couldn’t impress bulls.Australia Westpac Consumer Confidence may offer intermediate direction but nothing more important than US CPI.AUD/USD wobbles around mid-0.7800s, after posting mild daily gains, as traders embrace for the key US Consumer Price Index on Wednesday. The Aussie pair begins the key day within the latest choppy range between 0.7835 and 0.7850, also comprising a brief move touching 7819 and 0.7857. Not only the pre-event cautious sentiment but a lack of major data and mixed response from the recent catalysts also test the quote’s moves. All eyes on US inflation… Although China’s headline inflation figures came in positive and Australia's budget also ignored the record deficit to promote economic recovery, not to forget strong US second-tier data, AUD/USD stayed lacklustre. The reason could be traced from the market belief that the economy is heating due to the heavy stimulus to battle the pandemic, which in turn could push the central banks to recall the easy money policy, versus the policymakers’ efforts to convince of inaction, for now. Aussie budget for 2021-22 fiscal year, published on Tuesday, stayed on course to heavy spending, as expected. The important point was that the government expects inflation to cross 2.0% in 2022-23, which in turn suggests no challenges for the RBA, at least for now. Before the budget, China published April’s Consumer Price Index (CPI) and Producer Price Index (PPI) data wherein the headline CPI eased from upbeat forecast but the factory-gate inflation, PPI, jumped to the highest since October 2017. Also on the data side could be the upbeat US JOLTS Job Openings and NIFB Business Optimism Index. It should be noted that the technology sector keeps weighing on Wall Street and the overall market sentiment also turned sluggish amid mixed updates concerning the coronavirus (COVID-19) and vaccinations. The United Nations (UN) is holding a secret meeting over the Middle East tensions but nothing major arrived yet. Looking forward, Australia’s Westpac Consumer Confidence for May, prior 6.2%, can offer immediate direction but traders are likely to witness less volatility in Asia as they fear for the US inflation figures, which they should. Given the upbeat US Treasury yields keeping markets cautiously positive, mildly upbeat inflation can do its work to balance the market and keep AUD/USD buyers hopeful. “Fed’s inflation analysis proves accurate is, for the moment, irrelevant.  There is no CPI result that will prompt speculation on interest rates,” said FXStreet’s Joseph Trevisani. Read: US Consumer Price Index April Preview: The two base effects of inflation Technical analysis AUD/USD remains inside the key 0.7820-7900 area, comprising late April tops and February levels respectively, with oscillators suggesting bullish momentum.