By Margaret Yang, CMC Markets
Equities – Federal Reserve Chairwoman Janet Yellen commented that a rate increase could be appropriate in the coming months if the economy and labour market were to continue to improve.
This is generally in line with market expectations as a series of positive US economic data have led a number of Fed governors to take a more hawkish stance towards a possible summer rate hike. The S&P 500 rose 0.4%, marking a weekly gain of 2.3%.
This morning, Noble Group has announced that its CEO Yusuf Alireza, in the position for four years, has resigned due to family reasons. The company will also sell the US energy marketing firm Noble Americas Energy solutions to raise cash to strengthen its balance sheet. The share price has plunged almost 40% from March, and a lot of bad news surrounding this company has been priced into the share price.
In the short term, market sentiment is likely to be affected. If a change of management could bring in structural reform going forward, however, then it is probably not bad news in the long term.
FX – The Dollar Index climbed to 95.87 on Yellen’s statement that a rate hike could be appropriate in the months ahead. USD/JPY rose to the 110.70 area this morning, with immediate support and resistance levels at 111.00 and 108.30 respectively. EUR/USD has retraced to the 1.1100 area, testing the key support level again. AUD/USD has dropped to 0.7160, a fresh three-month low.
Commodities – WTI Crude Oil prices retraced to $49.50 this morning. A few technical indicators have shown that a strong resistance level is found near the $50.00 area, as discussed earlier. The strong USD continued to suppress Gold and Silver prices. Gold has tumbled to $1,203, its lowest level in over three months. Silver has dropped to the $16.00 area, and the next support level could be found near $15.63.
Noble Group
- Challenging the 61.8% Fibonacci extension level
- Immediate support level: $0.30, followed by $0.26
- 23% RSI indicate oversold
Margaret Yang Yan, CFA, is a market analyst for CMC Markets Singapore.
