Lumber Tumbles from Record Levels
Lumber prices slumped to $1,327 per thousand board feet from a record high of almost $1,700 hit on May 7th, on concerns that futures were overvalued, and purchases slowed on hopes the price will decline further. Still, lumber futures remain up 280% in the past year, as supply is unable to meet rising demand from the renovation and home markets. Demand for lumber stays strong as lockdowns in the US continued to ease and peak spring construction season started, with housing starts in March notching the highest level since June 2006.
Stocks in Bahrain Hit 14-month High
Estirad increased to a 14-month high of 1537
Euro Rises Above $1.22
The euro appreciated above the $1.22 level for the first time since February 28th, helped by broad dollar weakness and the prospect of a solid economic recovery in 2021. Countries in Europe continued their reopening efforts, with France and Austria allowing non-essential business to reopen starting from May 19th, although certain limitations would be still in place. Elsewhere, Cyprus, Greece, Germany, Italy, the Netherlands, Portugal and the UK started to open their borders and other countries are likely to follow suit in June. Last week, the European Commission revised upwards its GDP forecasts for 2021 and 2022, saying that all Member States should see their economies return to pre-crisis levels by the end of 2022. On the monetary policy front, the account of April’s meeting showed ECB officials will conduct a thorough assessment of financing conditions and the inflation outlook in June, as they seemed especially concerned about the firming of the euro against the dollar.
Chinese Yuan Gains
The Chinese Yuan added 0.01485 points or 0.23% to 6.42606 against the US Dollar on Tuesday after the onshore rate was set at 6.4357. Investors tempered earlier expectations that the US central bank could hike interest rates soon. Dallas Federal Reserve President Robert Kaplan on Monday reiterated that he does not expect interest rates to rise until next year and that the economy may grow by 6.4%, fuelling a further decline in bets that inflationary pressure could force the Fed to act sooner. On the trade front, China announced Monday another extension of tariff exemptions for a total of 79 products imported from the US. The new extension will kick in on May 19th and is set to expire on December 25th, 2021. In recent data, China’s industrial profits rose 9.8% from a year earlier while retail sales gained 17.7%. Both decelerated from the previous month and trailed consensus forecasts.