Key US CPI data released yesterday showed that annualized inflation fell from 3.4% to 3.1%.
➡️ UK CPI (inflation) data released today shows an unchanged annualized rate of 4.0%, while a slight increase to 4.1% was expected. This is a slight dovish tilt, but it was enough to push the pound lower, with the GBP/USD currency pair traded starting from $1.12555, a weekly low price.
➡️ Yesterday's release of US inflation data saw the annualized rate fall from 3.4% to 3.1%. A stronger drop was expected, to 2.9%, so the market received a surprise. As expected, this lower number led to the sell-off in US stock markets, with the major stock indexes S&P 500 , NASDAQ 100 And Dow Jones 30 which all suffered heavy losses before recording a partial recovery. CME's FedWatch tool shows that market expectations for a rate cut in May have fallen further after already falling over the past two weeks, with only 37% deeming -0.25% likely.
➡️ Despite the declining trend in US stock markets, traders will still look to get involved on the Long side, and day traders may consider trading these indexes Long if they show bullish momentum after the market opens.
➡️ In the Forex market , the New Zealand dollar has been the strongest major currency since Tokyo opened today. The US dollar was the weakest. The highest volatility has recently been observed in the currency pair USD/JPY and in crosses with the Yen, although this is starting to decline. Despite the US dollar's short-term decline, it has seen some bullish momentum, with the DXY dollar index hitting a new 3-month high. Currency pairs EUR/USD , USD/JPY, AUD/USD And USD/CHF they all saw the dollar hit new 3-month highs.
➡️ Japan's chief “currency diplomat,” Kanda, in response to yesterday's sharp decline in the Japanese yen against the US dollar, issued a public statement intended to support the yen, apparently with some initial success. He said the yen's movements are rapid, could have a negative effect on the Japanese economy and that he stands ready to respond at any time. Many analysts point out that this dollar strength may make it difficult for the Bank of Japan to abandon its ultra-expansionary monetary policy that it has maintained for several years, as it plans to do later in 2024.
➡️ Cocoa futures are experiencing bullish consolidation just below the recent multi-year high. Trend traders will remain interested in this commodity on the Long side. It has shown a powerful bullish trend for over a year. Cocoa futures have risen more than 25% since the start of 2024.
➡️ Bitcoin is still testing the big round number at $ 50,000. I think bulls will be wise to wait until the daily close above the big round number at $50,000 before entering any new Long trades here.
➡️ Yesterday's release of Swiss CPI (inflation) data showed a monthly increase of only 0.2% when an increase of 0.6% was expected. This is a dovish surprise and has helped weaken the Swiss franc over the past day.
➡️ The Governor of the Bank of England will testify before the British Parliament today.
➡️ The governor of the Reserve Bank of Australia will testify before the Australian Parliament today.
Credit by DailyForex.com
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