Volatility Stirs Up Crude Oil, Stock Markets Amid USD Strength

April 27, 2022 09:35

Volatility stirred up spot crude oil prices and global stock market performance as the USD stayed strong in overnight trading.  

USD strength pressured spot gold prices downwards. As gold is denominated in US dollars, the precious metal is relatively expensive with investors appearing to focus on the USD as the favoured safe-haven asset.  

Feeding into USD strength was the US Durable Goods Orders reading for March. The headline figure came in slightly lower-than-expected at 0.8 percent growth compared to the expected 1 percent growth. The miss wasn’t big enough for the USD to lose support as investors were cautiously optimistic over a 1.1 percent rise in core Durable Goods Orders.  

Crude oil spot price headed upwards on geopolitical supply fears stemming from the conflict in Ukraine. A market-moving report by the US Energy Information Administration (EIA) comes up later today and spot crude oil prices may be affected. The Weekly Petroleum Status Report shows the latest levels of US crude oil production, imports and stocks, making it a key benchmark in the oil markets.  

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Other trading news highlights today include ECB President Christine Lagarde and Bank of Canada Governor Macklem’s speeches. The ECB faces a challenging environment of inflationary headwinds and doubts over the resilience of the economic recovery from the COVID-19 pandemic downturn which is hampered by the conflict in Ukraine. Monetary tightening is expected to start in the third quarter but with the EUR under intense pressure from USD strength, the ECB may have to move faster.  

In more central bank news, The CAD may move on signals confirming that Canada’s monetary policy makers intend to raise key interest rate guidance by 0.5 percent at the meeting coming up in June. Canada’s inflation rate rose to 6.7 percent in March, a thirty-year high.  

In stock investment news, Facebook releases its first-quarter earnings later today, along with large-cap T-Mobile US Inc and Amgen Inc. There is heightened volatility in the stock markets as investors remain sensitive to outlook forecasts for the second quarter during earnings reports.  

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks. 

Sarah Fenwick
Sarah Fenwick Financial Writer, Admirals London

Sarah Fenwick's background is in journalism and mass communications. She has worked as a correspondent covering Swiss Stock Exchange news and written about finance and economics for 15 years.