Tue, May 18, 2021 @ 22:43 GMT
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GBP Climbs on Strong Job Data, CPI Next

The British pound touched a 3-month high earlier on Tuesday, when GBP/USD reached a high of 1.4220. In North American trade, the pair is trading at 1.4200, up 0.49% on the day. UK unemployment rate falls The pound received a lift from positive UK employment numbers, which were released earlier in the...

FOMC Minutes: Avoiding the “T” Word

The minutes of the Federal Reserve’s April 27-28 policy meeting are due on Wednesday (18:00 GMT) but investors are not holding their breath for any taper signals. The Fed has not moved an inch with its policy stance this year even as the consumer price index has skyrocketed to...

US open: Reopening Optimism and a Dovish Fed Lift Futures

Stocks point higher as optimism surrounding the economic reopening overshadows rising covid cases in Asia and as the Fed continues to reiterate its dovish intentions. USD dives to 3 month low. US futures Dow futures +0.15% at 34382 S&P futures +0.2% at 4171 Nasdaq futures +0.5% at 13386 In Europe FTSE...

A Dovish Fed And Improving UK Jobs Market Lift European Stocks

European bourses have powered higher out of the starting blocks on Tuesday, boosted by the Fed’s promise of low rates for longer and upbeat UK jobs data. Inflation concerns dominated the markets last week, but they’re starting to ebb after softer-than-expected US consumer spending and further reassurance from the Fed....

An Unfolding Battle For The Dollar

The markets are now seeing renewed pressure on the US currency and an increase in demand for risky assets due to soft comments from the Fed. Richard Clarida reminded us that the FOMC would warn us before considering winding down its asset purchase programme for the central bank balance...

PoS Or Not, If Bitcoin Does Down, Others Should Follow

It's a slow start to the week and there is not much appetite across the equity markets. A part of this global lack of appetite is due to the inflation worries, but most of it, is due to the revival of virus worries as the Indian variant is now...

Too Soon To Talk About Tapering

Market movers today There are no market moving data releases scheduled for today, but ECB's Lagarde and Villeroy, as well as Fed's Kaplan, will be on the wires. The German constitutional court (GCC) will meet today and give a final verdict on the legality of the ECB's PSPP programme. The...

Fed Kaplan: Possible to hike interest rates before 2022 end

Dallas Fed President Robert Kaplan expected inflation to decline in the fall, but may remain elevated by year-end. He added that Fed will continue to monitor inflation closely, as the economy works through imbalances caused by the pandemic. Meanwhile, he expects GDP to grow by 6.4% this year, while unemployment...

Asian Virus Flareups Dent Equities But Dollar Struggles As Yields Slip

Fresh virus spike in Asia weighs on stocks and bond yields, lifting gold But some support for risk assets as taper fears ease after soft US retail sales Dollar steady as investors await Fed speakers and April minutes for new clues Asian virus escalation saps sentiment Market sentiment got off...

Weekly Economic & Financial Commentary: Reopening Comes with a Steep Price Tag

Summary United States: Reopening Comes with a Steep Price Tag The leap in consumer prices this week laid bare that challenges in meeting soaring demand come with a cost. There were few signs of the mismatch between supply and demand beginning to come back into balance. April retail sales were...

Week Ahead – Inflation Scare Shakes Markets, European PMIs Next

It was a wild week in financial markets. Stocks got smoked while the dollar clawed back some ground as inflation finally showed its teeth, reigniting worries about higher interest rates being on the horizon. The upcoming week seems calmer. There are no central bank meetings and the minutes of...

The Stock Market Began To Recover After The US Federal Reserve Officials Said That The Rise In The Inflation Is Temporary

The US stock market closed with growth on Thursday. S&P 500 index rose by 1.22%, Dow Jones added 1.29%. The trigger for the growth was the statement of the US Fed that no changes in the monetary policy will be held in the near future, and the inflation growth...

Fed Backs Stock Buyers And Returns Pressure On The Dollar

Cautious demand for risky assets is returning to global markets after reassurances from Fed members, dampening inflation fears. Key indices in the US and beyond are clinging to a bullish trend. Last night we saw rising demand near important support levels, which remains in place on Friday morning. In turn,...

Wall Street Snaps Losing Streak, But Retail Sales Get The Final Say

Stocks bounce back as Fed calms tapering nerves, dollar retreats US retail sales today could spark another round of volatility Bank of Canada chief talks down loonie, FX market quiet overall Equity markets roar back The inflation scare on Wall Street turned out to be ‘transitory’ after all. The major...

European Open: Bullish Candles Form On European Indices

Asian equities were mostly higher overnight thanks to a positive lead from Wall Street, after Fed members calmed market nerves of rising inflation, helping equities to snap a three-day losing streak. Asian Indices: Australia's ASX 200 index rose by 64.9 points (0.93%) and currently trades at 7,047.60 Japan's Nikkei 225...

Sentiment Further Stabilized as Focus Turns to US Retail Sales

The forex markets are steady in Asian session today as sentiment stabilized, following strong rebound in US stocks overnight. Dollar is currently the second strongest for the week, just next to Sterling. But no key level was taken out with the rebound in the last few days. The greenback...

Fed Bullard: US is moving into expansion phase of business cycle

St. Louis Fed President James Bullard said in a presentation that the US economy is "poised to surpass the previous peak" in the current quarter. The US is "moving into the expansion phase of the business cycle". "Market-based inflation expectations have recovered from the lows reached during March 2020," he...

Fed Waller talked down weak job and strong inflation data

Fed Governor Christopher Waller delivered his "two messages" in a speech yesterday. Firstly, "despite an unexpectedly weak jobs report, the U.S. economy is hitting the gas and continuing to make a very strong recovery from the severe COVID-19 recession." Secondly, "despite the unexpectedly high CPI inflation report yesterday, the factors...

Dollar in Trouble? Markets Believe the Fed on Tapering But Not on Inflation

The US dollar has crashed below its uptrend line as its bullish narrative has once again been called into question. The shockingly big miss of the April NFP estimate has proven the Fed right and the markets wrong on the economy. Subsequently, the dollar has been knocked off its...

Inflation Concerns & Falling Commodity Prices Hit European Stocks

European bourses are a sea of red following on from a deep selloff on Wall Street. US inflation jumping to its highest level in 13 years has spooked the market, whilst a sell-off in commodities is giving the bears more room to run. Inflation fears have been stalking the market...

Stocks Tank, Dollar Roars As Inflation Shows Its Teeth

Dollar comes back fighting, stocks pummeled after US inflation surprise Traders price in Fed rate hike for next year, but it’s still early days Producer prices coming up today ahead of crucial retail sales tomorrow Inflation wins this round Worries around higher interest rates being on the horizon have returned...

Inflation Angst Roils Markets

Market fears surrounding US inflation has fuelled declines in global equities, with Asian benchmark indices falling in tandem with the drop in US stocks. On Wednesday, the Dow fell 1.99% to register its largest single-day loss since January, wiping out all of its month-to-date gains, while the S&P 500 and...

Fed Clarida: It’s important that pressures to inflation be transitory

Fed Vice Chair Richard Clarida said he expected inflation to "return to – or perhaps run somewhat above – our 2% longer-run goal in 2022 and 2023". That would actually fit under the new policy framework. Though, he admitted that he was "surprised by higher-than-expected inflation data released today"....

All Eyes On US CPI Following Strong UK Data

The uncertainty about inflation being transitory or otherwise remains unchanged even though several Fed officials attempted to quell fears yesterday. Investors are awaiting the publication of the US CPI inflation report for the month of April, due at 13:30 BST. This is expected to show a sizeable year-over-year rise...

UK Q1 GDP Data: Details Aren’t Really Encouraging

Markets Monday's big divergence between rising inflation expectations and declining real yields didn't really persist yesterday. Both slightly increased leaving US yields 0.5 bps (2-yr) to 2 bps (30-yr) higher on the day. The US Treasury kicked off its mid-month refinancing operation with a $58bn 3-yr Note auction. It tailed...

Inflation Matters, But Fed Policy Matters More

Fear of seeing a high inflation print today has been a nightmare for the tech stocks since the beginning of the week. Technology stocks are under a decent selling pressure, even though Nasdaq could recover some 2% of earlier losses to close Tuesday's session near flat. Dow Jones tanked 1.36%...

Dollar Recovers But Not Turning Around Yet, Sterling Firm

Dollar recovers broadly today even though Fed officials sung a chorus emphasizing patience in monetary policy. Canadian Dollar is also firm with help from rebound in oil prices. On the other hand, Australian Dollar is trading generally lower together with Kiwi. Nevertheless, for the week so far, Sterling remains...

Fed Harker: Recovery is still a work in progress

Philadelphia Fed President Patrick Harker said in a speech, "we'll keep the federal funds rate very low and continue making more than $100 billion in monthly Treasury bond and mortgage-backed securities purchases. While the economic situation is improving, recovery is still a work in progress, and there's no reason...

Fed Bullard: It’s too early to talk taper here

St. Louis Fed President James Bullard told CNBC, "I think it's too early to talk taper here". And, "we're going to let the chair open that discussion when he thinks it's appropriate." "We're not quite out of the pandemic yet," he added. "Once we get out of the pandemic, then I...

Fed Brainard: Weak job data underscores the value of patience

Fed Governor Lael Brainard said that the weak April NFP report "reminds us that realized outcomes can diverge from forward projections and underscores the value of patience". Also, "to the extent that supply chain congestion and other reopening frictions are transitory, they are unlikely to generate persistently higher inflation...