On May 14th, Federal Reserve Bank of Boston President Susan Collins stated that interest rates should remain unchanged "for a period of time," noting her particular concern about persistently high inflation. In prepared remarks for an event organized by the Boston Economic Club on Wednesday, Collins said, "More than five years of inflation above target has worn my patience thin for 'looking through' another supply shock." Collins anticipates that if the Middle East conflict can be resolved "fairly quickly," this year will deliver solid economic growth, with the unemployment rate potentially rising slightly, but little progress will be made in reducing inflation. "I believe it may be important to maintain the current somewhat restrictive policy stance for a period of time," she added, stating that inflation above target levels makes keeping inflation expectations anchored near the Fed's 2% target a focal point.
Additionally, due to the ongoing closure of the Strait of Hormuz resulting from the Iran conflict, the Organization of the Petroleum Exporting Countries (OPEC) on Wednesday lowered its forecast for global oil demand growth in 2026, becoming another major energy agency to cut expectations following the International Energy Agency (IEA). However, OPEC's assessment of the extent of demand damage is more moderate than the IEA's. According to OPEC's latest monthly report, global oil demand in 2026 is now expected to grow by 1.17 million barrels per day, down from a previous forecast of 1.38 million barrels per day. Concurrently, OPEC raised its demand growth forecast for 2027 to 1.54 million barrels per day, an increase of 200,000 barrels per day from its previous projection. The organization believes consumption will rebound in the later period. "Despite ongoing geopolitical tensions, particularly in the Middle East, global economic growth has shown resilience this year," OPEC stated in the report, maintaining its economic growth forecasts unchanged.
Key data to watch today includes: UK March Monthly GDP, UK March Monthly Industrial Production, UK March Trade in Goods, UK Preliminary Q1 GDP Annualized (Production Approach), US April Import Price Index (Monthly), US Initial Jobless Claims for the week ending May 9th, and US April Retail Sales (Monthly).
Gold/USD Gold experienced volatile consolidation yesterday, closing slightly lower on the daily chart, with the current spot price trading around 4697. The primary factor pressuring gold lower was the continued climb of the US Dollar Index, supported by favorable economic data and safe-haven demand. Furthermore, the rekindled expectations for Federal Reserve interest rate hikes and rising US Treasury yields also contributed significantly to the downward pressure on gold. Today, focus will be on resistance around the 4750 level, with support seen near 4650.
USD/JPY USD/JPY edged higher with volatility yesterday, closing slightly up on the daily chart, with the current spot price trading around 157.90. The main driver supporting the pair's gains was the sustained rise in the US Dollar Index, bolstered by strong economic data reigniting Fed hike expectations and hawkish remarks from Fed officials. However, concerns about potential renewed intervention by Japanese authorities in the currency market limited the pair's upside. Today, attention will be on resistance around the 159.00 level, with support near 157.00.
USD/CAD USD/CAD moved higher with volatility yesterday, closing slightly up on the daily chart, with the current spot price trading around 1.3710. The primary support for the pair's gain was the rise in the US Dollar Index, driven by favorable economic data reigniting Fed hike expectations and safe-haven demand. Additionally, the retreat from recent highs in crude oil prices also provided some support for the pair. Today, focus will be on resistance around the 1.3800 level, with support seen near 1.3600.
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