Well, yesterday was an interesting day indeed, as CPI figures came out above expectation we saw some volatility come into the market. Inflation increased from last month 5% to 5.4% giving the Fed some real food for thought as the next FOMC meeting is due at the end of the month. The Fed commented during the trading day that they will also start tapering later this year causing a bigger selloff in the market as we saw a sharp decline of the US indices as they all closed the day lower.
The European Indices remain somewhat directionless as the FTSE remains in its respective range, the Dax on the other hand hasn’t followed through following the break it had at the start of the week.
The much-anticipated inflation figures were crucial for the precious metals, however, the lack of movement could be something to be concerned about. As we saw inflation growing there could be more pressure on the Fed to increase interest rates sooner than expected. Brent continued its upward trajectory following the OPEC meetings as it closed the day out on $76.
The increase in Dollar strength and inflationary pressures caused a higher selloff in the crypto market as Bitcoin and Ethereum edged lower.
During the Asian session the Pound, Australian and New Zealand Dollar were the strongest currencies, the Canadian Dollar remains neutral as the Bank of Canada is due to release their monetary policy statements. Fed Chair Powell is due to testify today and should elaborate more on the asset purchases that will be tapered later this year.
4:00 am - RBNZ Rate Statement (NZD)
8:00 am - CPI y/y (GBP)
2:30 pm - PPI m/m (USD)
4:00 pm - BOC Monetary Policy Report (CAD)
- BOC Rate Statement (CAD)
4:30 pm - Crude Oil Inventories (USD)
5:00 pm - BOC Press Conference (CAD)
6:00 pm - Fed Chair Powell Testifies (USD)
Due to testify on the Semi-Annual Monetary Policy Report before the House Financial Services Committee