Big US inflation report today

TAKEAWAYS

•    Forex markets little changed in low-vol trading conditions
•    Gold drops, silver slides -2% before US inflation data release
•    WTI crude lingers under $60 per barrel
•    Very little volatility in US equity markets before start of earnings season
•    Fed’s Bullard says 75% vaccination rate enough to justify QE ‘taper talk’
•    Alibaba stock jumps 6% after record Chinese fine
•    Italy will begin a new 40-billion-euro stimulus package
•    India now 2nd-worst hit country by covid-19, overtakes Brazil, behind US
•    DAY AHEAD: US CPI

Sources: Bloomberg.com / FT.com / CNBC.com

BEST CHART
AUD/USD – Daily Candlesticks

 
Source: GKFX Prime / Metatrader 4 

AUD/USD is trading in a tight sideways range above the neckline of a possible Head & Shoulders top pattern. There has already be one false break lower but another attempt to push the Aussie dollar lower is possible.

GURU WISDOM

“The four most dangerous words in investing are: This time it’s different.” – Sir John Templeton

MARKETS

*Daily closing price
↗ EUR/USD    1.1910        (+0.11%)
↗ GBP/USD    1.3745        (+0.27%)
↘ USD/JPY    109.39        (-0.29%)
↗ S&P 500    4129.03    (+0.01%)
↘ Gold        1743.10    (-0.73%)
↘ Oil (Brent)    63.01        (-0.30%)
↗ Bitcoin    59,823        (+2.94%)

Source: Investing.com

NEWS

It has been a slow start of the week for stock and forex trading. Traders are sitting on their hands before some big economic releases and the kick off of US earnings season this week.

It’s a potentially big US inflation report today. US PPI blew through expectations and if there same were to happen with CPI, it could be a boost to bond yields (and thus the USD), which have been trending lower lately. The consensus forecast is that inflation is 2.5% above last year’s levels. That’s above the Fed’s forecast but the number is distorted by slumping prices last year at the outset of the pandemic. For that reason, the Fed have said they will look through in any ‘temporary’ jump in inflation. Therefore, the CPI number may need to be well ahead of expectations to get a reaction from markets. 

Tech stocks rebounded strongly last week in expectation of another strong quarter of earnings as many economies remain locked down and overly reliant of tech. Those gains slowed down Monday with the S&P 500 hovering unchanged near its record high. The mixed picture on covid-19, including a big increase in cases in India weighed on the price of oil.

Source: TradingWriters.com

DAY AHEAD 

*Times in GMT
N/A – China Trade Balance USD(Mar) [$52.05 B Exp vs. $103.25 B Prev]
06:00 – UK Manufacturing Production (MoM) (Feb) [-0.8 % Exp vs. -2.3 % Prev]
09:00 – Germany ZEW Survey – Economic Sentiment (Apr) [79.5 Exp vs. 76.6 Prev]
12:30 – US Consumer Price Index (YoY)(Mar) [2.5 % Exp vs. 1.7 % Prev]

Source: GKFXprime.com/trading-tools/economic-calendar