HFM information and reviews
HFM
96%
Octa information and reviews
Octa
94%
FXCC information and reviews
FXCC
92%
FxPro information and reviews
FxPro
89%
FBS information and reviews
FBS
88%
Vantage information and reviews
Vantage
85%

Markets perk up as soft PPI sets the tone ahead of US CPI


14 August 2024 Written by Raffi Boyadjian XM Investment Analyst Raffi Boyadjian

Mood brightens ahead of US CPI data

The rebound in equity markets gained further traction on Tuesday after US producer prices rose less than expected in July, raising hopes that today’s report on consumer prices will also surprise to the downside.

Headline inflation in the United States is expected to have stayed unchanged at 3.0% y/y in July, but core CPI is forecast to have edged lower to 3.2% y/y.

The PPI data added fresh fuel to the recovery on Wall Street, with the S&P 500 closing up 1.7% and the Nasdaq 100 by 2.5%. The US dollar tumbled sharply, however, even though the move in Treasury yields was much more modest.

With recession risks ebbing again, an in-line CPI report is unlikely to dent the upbeat mood, but hotter-than-expected readings could deal a blow to the bounce back on Wall Street. Still, a full-blown panic is unlikely in such a scenario as investors might prefer to stay on the sidelines as they wait for Powell’s keynote speech at the Fed’s annual Jackson Hole Symposium next week.

Kiwi dives on ‘surprise’ RBNZ cut

Adding to the sense of optimism is the growing chorus of central banks joining the rate-cut club. The Reserve Bank of New Zealand became the latest to start its easing cycle, announcing a 25-basis-point reduction earlier today. Although the decision was not a complete surprise to traders, economists had anticipated the RBNZ to stay on hold at its August meeting.

Nevertheless, the New Zealand dollar slid by 1% against its US counterpart on the news as policymakers flagged at least one more cut by year-end. And although the scale of the drop was likely exaggerated by yesterday’s pullback in the greenback, the RBNZ’s complete dovish turn is likely to keep the kiwi on the backfoot in the near term.

UK CPI miss halts pound’s rebound

The UK’s run of pleasing CPI prints continued this month, as inflation data released today showed the headline figure came in slightly below forecasts at 2.2% y/y in July versus the 2.3% expected. More importantly, services CPI eased to 5.2% y/y from 5.7% and it follows yesterday’s similarly encouraging decline in wage growth, both of which have been a thorn in the side of the Bank of England’s fight against inflation.

Subsequently, investors are pricing in a more than 55% probability that the BoE will cut rates again in September and this may prevent the pound from fully retracing the past month’s slide.

Elsewhere, the yen was broadly weaker on the back of the risk-on sentiment, showing little reaction to the Japanese Prime Minister Fumio Kishida’s announcement that he will step down next month.

Gold and oil up on heightened Iran fears

In commodities, gold inched higher from Tuesday’s lows when it fell after failing to break tough resistance in the $2,475/oz area. But with the dollar likely to stay soft and growing fears of an imminent attack by Iran on Israel, the precious metal may yet scale a new all-time high in the coming sessions.

Oil futures were also positive on Wednesday, having slipped yesterday on demand worries. But the elevated risk of an escalation in Middle East tensions is keeping oil supported today.

By XM.com

#source


RELATED

Will the dollar or stocks smile after the non-farm payrolls print?

Spotlight falls on the key US labour market data. Non-farm payrolls to rise by 140k, but could surprise to the upside. Dollar to enjoy a strong set of data, equities prefer weaker prints. Euro suffering continues, while both gold and oil advance.

4 Oct 2024

Markets maintain upbeat mood ahead of PCE inflation

China stimulus and rate cut bets propel stocks higher. Dollar caught in choppy trading as crucial inflation data awaited. Yen surges as new LDP leader in favour of rate hikes set to become PM.

27 Sep 2024

Euro sinks on poor PMIs, dollar firms ahead of Fedspeak

Eurozone PMIs dip into contraction zone, euro takes a dive. Stocks mixed as weak PMIs offset optimism about China stimulus. Dollar edges up as after Waller comments. Powell and PCE inflation eyed next.

23 Sep 2024

Daily Comment Let the Fed rate cuts begin

Dollar trades indecisively ahead of important Fed decision. Investors assign a strong 60% chance for a 50bps cut. Wall Street and gold traders also on the edge of their seats. Pound rebounds on sticky UK inflation.

18 Sep 2024

Dollar sinks, gold surges as 50bps Fed cut back in the picture

Soft US PPI and reports of Fed dilemma revive bets of 50bps cut; Dollar plunges as yields fall, pushing gold to new all-time high. Euro climbs as ECB trims rates but does not signal October cut.

13 Sep 2024

Dollar firms after CPI, euro awaits ECB, techs lead equities rebound

US dollar edges up after CPI report wipes out 50-bps rate cut bets. Euro stuck on the backfoot in wait for ECB decision. Wall Street rebound gathers pace as tech stocks rally.

12 Sep 2024

Dollar and equities rebound from NFP-led losses as focus turns to US CPI

US jobs report adds to slowdown fears but provides no clarity about Fed policy. Dollar whipsaws while stocks tumble as "September effect" takes hold.

9 Sep 2024

Nvidia earnings fail to buoy markets, focus turns to US data

Nvidia slumps in after-hours trading as earnings don't excite. Equities mixed as attention turns to US data for direction. Kiwi outperforms, euro slips on soft German and Spanish CPI figures.

29 Aug 2024

Rate cut euphoria tempered by geopolitics as oil surges

Mood turns cautious amid geopolitical uncertainty in Libya and Gaza. Fears of supply disruptions drive up oil prices, S&P 500 closes lower. China concerns also weigh but European stocks turn positive as data awaited.

27 Aug 2024

Powell signals it's time to cut; dollar sinks but risk rally muted

Powell says the time has come for rate cuts, pushing yields and dollar lower. But cautious rally in stocks as Nvidia earnings, inflation data awaited. Oil jumps amid fresh escalation between Israel and Hezbollah.

26 Aug 2024

Dollar looks at the Fed minutes for a small boost

Dollar weakness dominates the FX space. Today's Fed minutes could halt the euro/dollar rally. Markets are gearing up to the Powell's Jackson Hole speech. Oil prices remain under pressure.

21 Aug 2024

Has the recent market angst fizzled out?

Improved market sentiment, Nasdaq 100 records weekly increase. Yen holds recent strong gains as euro/dollar trades sideways today. Rich data calendar this week, US CPI to dictate Fedspeak. Gold and oil rally as Iran is expected to attack Israel.

12 Aug 2024

Sentiment improves after drop in US jobless claims

US dollar gains as data ease further recession concerns. Aussie benefits the most, also helped by RBA's Bullock. Wall Street rebounds, oil and gold gain as well.

9 Aug 2024

Crypto investors have lost their nerve

The cryptocurrency market was hit by a sell-off over the weekend, the likes of which haven't been seen in a long time.

5 Aug 2024

Dollar plummets as US jobs data spread panic

Disappointing US jobs data push dollar off the cliff. Yen extends rally as fears over US economy mount. Stocks drop, VIX rallies to levels seen more than a year ago.

5 Aug 2024

Markets in waiting mode ahead of earnings releases and risk events

Key earnings releases and numerous central bank meetings coming up. US stocks in waiting mode, dollar recovering across the board. Key euro area data today but all eyes are on Wednesday's BoJ meeting. Gold, oil and bitcoin move in parallel.

30 Jul 2024

Dollar stays on the back foot ahead of Powell

Dollar stays on the back foot ahead of Powell. Euro gains ground after French vote. Yen steady as BoJ discusses bond purchases. Wall Street extends rally, gold pulls back.

9 Jul 2024

Spotlight on NFP as dollar sinks; pound unmoved by Labour landslide

Dollar slips further ahead of crucial US jobs report. Pound marginally higher as Labour crush the Tories in UK election. Equities set to end week on a high note, Bitcoin keeps slumping.

5 Jul 2024

Yen's misery worsens, euro lower after CPI dip, dollar awaits Powell

Yen sinks to fresh 38-year low as officials refrain from verbal intervention. Euro pares gains after CPI dip and French election uncertainty. Dollar edges up on higher yields, but caution ahead of Powell comments.

2 Jul 2024

Core PCE in focus ahead of French elections

Dollar gains after first presidential debate. Focus today turns to core PCE inflation. Yen slides, intervention risks rise. French citizens head to the ballots on Sunday.

28 Jun 2024


Editors' Picks

Regulation Matters: Why a Licensed Forex Broker Should Be Your Top Priority

Choosing a regulated broker is not just a matter of preference; it is a necessity for safeguarding your investments and ensuring that you trade in a fair and secure environment.

Automating Success: The Benefits and Risks of Using Forex Expert Advisors

This article explores the benefits and risks associated with using Forex Expert Advisors, providing insights into how traders can maximize their potential while mitigating potential downsides.

Best Forex Brokers 2024

By prioritizing factors such as overall rating, regulatory compliance, trading conditions and platform reliability traders can make an informed decision that aligns with their trading needs and aspirations, setting the stage for a potentially prosperous trading journey.

The Top Forex Expert Advisors 2024: Performance, Strategy, and Reliability Review

An annual roundup reviewing the most successful Forex Expert Advisors (EAs) based on their performance, strategies employed, reliability, and user feedback. This piece would provide insights into which EAs have been market leaders and why.

The Evolution of Forex Expert Advisors: Navigating the Path of Technological Revolution

The concept of automated trading has been around for decades, but the accessibility and sophistication of Forex EAs have seen significant advancements in the past few years. Initially, automated trading systems were rudimentary, focusing on simple indicators like moving averages.

Best Forex EAs 2024 – Forex Expert Advisors Rating

Expert Advisors (EAs) Rating features high-quality Free and paid Forex EA most popular on the market today.

MultiBank Group information and reviews
MultiBank Group
84%
XM information and reviews
XM
82%
FP Markets information and reviews
FP Markets
81%
FXTM information and reviews
FXTM
80%
AMarkets information and reviews
AMarkets
79%
BlackBull information and reviews
BlackBull
78%

© 2006-2024 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.