Hello traders, welcome to Friday. Let’s dive into the market movements from Thursday and set the stage for today’s trading.
Yesterday, the UK reported a stronger-than-expected GDP growth of 0.4%, which boosted the British Pound significantly. However, the main event was the US CPI data, which showed a lower-than-expected inflation rate of 3% annually and -0.1% monthly. This weaker inflation data led to a broad weakening of the US dollar. Conversely, the Japanese Yen strengthened considerably, possibly due to the BoJ intervention, even though officials have downplayed such actions.
The US and Canadian dollars were the weakest currencies yesterday. Yen - the strongest one. European indices had a strong performance, pushing higher as they attempt to catch up with recent gains seen in the US. However, US indices experienced a correction on Thursday, pulling back from their recent highs. This divergence in performance highlights the differing economic sentiments and reactions to recent data between the regions.
On the commodities market, oil is rebounding after a recent dip. WTI crude is showing resilience, holding above key support levels, indicating that the buy signal remains intact. Precious metals, including gold and silver, are benefiting from the weaker dollar, with both metals climbing higher. Today’s focus will be on the US Producer Price Index (PPI) and the University of Michigan consumer sentiment index. These data points are crucial for gauging future inflation trends and overall economic sentiment.
Today’s trading will be heavily influenced by the upcoming economic data. Inflation and consumer sentiment readings from the US will likely dictate market movements, impacting currencies, commodities, and indices alike. Stay tuned for potential volatility and be prepared for significant market shifts.