News Summary

The U.S. dollar rallied sharply against all the other major currencies in May, amid growing speculation over an earlier-than-expected end to the Federal Reserve’s asset purchase program. Fed Chairman Ben Bernanke said earlier in the month that a decision to scale back the U.S. central bank’s USD85 billion-dollar-a-month bond buying program could be taken in the "next few meetings" depending on economic data. Minutes from the Fed’s May meeting showed a "number" of policymakers were prepared to taper bonds purchases as soon as June. The news hit most commodities, with gold futures losing nearly 6% in May, while silver prices tumbled more than 8%. Japanese stocks sold off sharply as increased volatility in the Japanese bond market spooked global investors. The Nikkei plunged 7% on May 23, the most since the aftermath of the devastating earthquake and tsunami that hit the country in March 2011, as Japanese government bond yields spiked.

Fear of Fed's program cut pushed the yield on benchmark U.S. 10-year Treasury notes to the highest since April 2012.

This Month's Sentiments

Thousands of our readers vote every month on the direction of the S&P, Gold and EUR/USD. Don't miss this firsthand look at these crucial trends.

&nbspS&P 500                                                 Gold                                                         EUR/USD

Editor's Pick

Gold's decline as well as the possibility of the Fed tapering QA were of major concern throughout May. Cam Hui suggests using Gold as the canary in the coal mine in order to get an early read how the Fed's actions will affect the stock market.

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