Overnight Headlines

*Asian stocks rise as Shanghai slowly emerges from lockdown

*Dollar knocked from 20-year high as EUR stays defensive around 1.0450

*Oil steadies after four-day surge, gold rebounds from $1786 low

*US futures are positive after Wall Street starts the week in the red

USD trades soft for a third consecutive day this morning after touching 105 last Friday. The DXY is currently trading around the 104 handle. EUR moved modestly higher following verbal intervention from the ECB’s Villeroy. GBP reached above 1.23 while USD/JPY printed a doji in a narrow range day. USD lost ground to the CAD and is heading towards 1.28. AUD pushed beyond 0.70 this morning with a third day of gains.

US equities closed a mixed bag in another volatile session. The S&P500 shed about 1% before gaining 0.56%. It closed marginally lower, down -0.39%. The Nasdaq was the underperformer, retreating -1.16%. The tech-laden index is now 28% below its intraday record high from late November. Asian stocks are in positive territory as hopes grow for an easing of China’s regulatory crackdown on the tech sector. The potential lifting of lockdown restrictions in Shanghai is also helping European and US futures.

Day Ahead – Central bank speakers aplenty

There are alot of heavy-duty ECB and Fed officials due on the wires over the next couple of sessions. In the US, we will hear comments form the Fed’s Powell, Bullard, Harker, Mester, Evans and Kashkari. New York Fed President John William yesterday affirmed other Fed members’ position that inflation in the US is running too high. He added to the consensus position of more 50bp rate hikes at upcoming meetings to get the real interest rate back to zero next year. This afternoon’s retail sales figures might also give markets a steer on how well the US consumer is handling higher prices.

The ECB President Lagarde is also due to speak later today. Governing Council officials have set up a series of rate hikes with the market pricing in the near certainty of a 25bp rate move in July. This means the bank’s asset purchase programme will end in June, with potentially another couple of rate hikes after the July meeting.

Chart of the Day – Oil prices climb

Oil prices are closing in on the $115/barrel level with strong demand pushing prices higher. An end to lockdown in Shanghai is helping, while the US driving season is getting nearer.

Brent crude is enjoying its fifth day of gains and looks to have broken trendline resistance from the March highs. The May top is near-term resistance at $113.44, then the April peak at $113.97. Bulls will be eyeing up the March high just above $120. Support sits at $110and the 50-day SMA at $107.58.