[Market Commentary] Copper prices rise; crude oil also strong, corn and wheat rebound
☆ The biggest concern in financial markets is inflation; watchful of the Fed's tapering
☆ The biggest concerns in crypto are regulation in China, followed by regulation in the United States
May 27 (Thu): European and U.S. markets continue to lack clear direction. The VIX, which measures fear, remains soft at 16.74. The expected spillover into financial markets from the cryptocurrency crash appears to have subsided. The Nikkei Average rose to near 29,000 as the dollar-yen approached 110. The U.S. initial jobless claims were 406,000, down from 444,000 the prior week, the lowest since the pandemic.
The dollar index remained largely unchanged while the euro/yen rose, indicating a strengthening yen. The Bank of England's Deputy Paul Briha hinted at possible rate hikes in early 2022, lifting the pound to high levels and contributing to a sharp rise in the GBP/JPY pair due to yen weakness. The 156 yen level is the highest since late January 2018. Germany's DAX fell 0.28% from the previous day, producing three consecutive bearish candles, though the uptrend remains intact.
The Dow reached an all-time high on May 10, and from the May 27 close it is within 1.8% of that level, suggesting it is within reach. The Canadian dollar turned higher, and combined with yen weakness, CAD/JPY increased significantly. The Chinese yuan is trading at a three-year high against the dollar. The Oceania region showed little change. India's NIFTY 50 index rose modestly, approaching an all-time high.
Trading in the Chinese yuan is challenging, but there is some logic to trading related commodities as substitute assets—copper, crude oil, gold, and Chinese equities. Correlation analysis will be a future task. The U.S. 10-year Treasury yield rose to 1.6% and copper surged. NY crude oil remained strong, approaching the 67-dollar resistance band, aiming for the March 8 high of 67.98. Grains were broadly strong, with notable rebounds in corn and wheat.
[Source] Trading View USDCNY and oil (reversal) % comparison. The line below is ADX
The cryptocurrency market remains volatile, but the 24-hour range has been limited. Technical indicators showing trend strength, such as ADX, appear to be stabilizing. Bitcoin has not shown signs of moving toward the 40,000-dollar level, staying in the 38,000s. The cutoff time for options on Deribit and CME's SQ are 17:00 and 01:00, respectively.
At 21:30 today, the U.S. April Personal Consumption Expenditures (PCE Core Deflator) release is scheduled. Many people use this as a more informative inflation gauge than CPI.
【Trade-worthy assets】
NY Crude Oil
DAX, NIFTY 50
Euro/Yen, Pound/Yen
【Notes on Market Commentary】
Please read with the following points in mind.
① Whether the news is a transient factor
② Whether the impact on prices will be sustained
Divergence: providing an overview of financial markets and crypto market conditions
- Market commentary for traders
- Positioning of cryptocurrencies from financial markets
※ Traders may trade anything; you can focus on hot and promising assets, or ignore crypto if there is no signal
Trader mindset
・“An explanation after events occur” can be read passively and does not affect forecasting ability or trading performance.
・Current market moves cannot be described perfectly.
・Even if the direction is unclear, it is possible to profit.
・If analysts or strategists say “it will rise,” you can profit on pullbacks or corrections.
Traders can win without knowing market fundamentals. The stance of a report written by someone who only provides market commentary and analysis, versus someone like me who writes with a broader perspective, may differ slightly. However, please understand that even if I write it, it will still appear similar on the surface to typical market commentary.
