Midday Market Update: Markets suffer a broad selloff ahead of Jerome Powell`s speech

The dollar continued its rally finding support from hawkish comments by the Fed ahead of Fed Chair Jerome Powell`s speech later in the day. The Eurozone and Britain`s preliminary PMI data showed a worsened contraction in both economies this month. Global growth fears have returned to the table bringing down crude oil prices as the demand outlook weakens.

The USDCAD maintained steadily gains as the dollar strength continues ahead of US PMI data. On Wednesday the Fed signalled more tightening in the future to cap soaring inflation. The comments from Fed Chair Powell along with a 75bps rate hike lifted the dollar. The oil-linked CAD got undermined by weaker crude oil prices on Friday as recession fears return. Upcoming preliminary US PMI data and CAD Retail Sales in the New York time will give much volatility to the pair. The pair rose by +0.31% trading above 1.3500 with a low residing at 1.3470. An extended leg high is capped by 1.3550 and a move lower may take the pair to 1.3400.

EURJPY lost -0.39% with the Euro being undermined by mixed European preliminary PMI data which showed a deepened contraction in the eurozone economy. The German manufacturing PMI remained at 48.3 while the services PMI dropped to 45.4 from 47.2. The French Services PMI rose to 53.0 vs 50.5 surveyed and the Eurozone Manufacturing PMI fell to 48.5 along with Services PMI falling to 48.9 vs 49.0. The Yen got boosted by the Japanese government`s intervention on the Yen`s bearishness after they maintained an ultra-loose policy on key rates. The pair slumped to 139.00 after a rejection at 140.20 high. The next stop on the slide is 138.50 and 138.00.

GBPCHF tumbled by -1.30% following disappointing PMI readings indicating worsening Britain`s economy. The Composite PMI declined to 48.4 against the 49.0 anticipated, the Services PMI fell to 49.2 vs 50.0 and the Manufacturing PMI rose to 48.5 vs 47.5 expected. The SNB on Thursday joined the hiking squad and moved its key rates from negative territory to 0.50% hiking by 75bps strengthening the CHF. The pair got rejected at the 1.12800 resistance and is facing psychological support at 1.1000.

European stocks traded south to end the week. The FTSE100 gave up -2.21% after UK`s finance minister announced tax cuts. The index fell from 7200 high with bearish targets at 7000. The CAC 40 lost -2.32% despite a rise in French PMI data. Bears may face rejection at 5755 support. DAX was down -2.62% breaching a low last seen in March at 12400.

US stock futures joined in the broad selloff in the mid-European trading session. The Nasdaq 100 fell by -1.43% from 11530, the DJIA futures were down -1.40% from 30 180 while the S&P 50 futures were down -1.43% with targets set at 3650 and 3600.
Crude oil prices dipped on Friday amid dollar strength and resurging recession fears. Global growth fears continue to spread after a marathon of central banks` hiking this week though inflation is not calming anytime soon. Supply fears over Russia`s mobilisation plans may cap the black liquid’s fall. Brent dropped by -2.17% from the 90.80 mark and near-term targets may be seen at 87.30. USWTI fell by -2.67% currently trading a few ticks above 81.00.