Market Roundup
• US Consumer price index increases 0.4% in March
• US CPI rises 3.5% year-on-year, biggest gain in six months
• US Core CPI advances 0.4%; increases 3.8% year-on-year
• US Mar Real Earnings (MoM) 0.3%, 0.0% previous
• Traders on alert for Japan intervention to prop up yen
• Canada Feb Building Permits (MoM) ,9.3% -4.3% forecast,13.5% previous
• US Mar CPI Index, s.a 312.23, 311.05 previous
• US Mar CPI, n.s.a (MoM) 0.65%,0.62% previous
• US Mar CPI Index, n.s.a. 312.33, 312.10 forecast, 310.33 previous
• US Mar Core CPI Index 316.57 forecast, 315.57 previous
• US Mar Core CPI (MoM) 0.3% forecast, 0.4% previous
• US Mar CPI (MoM) 0.4%, 0.3% forecast,0.4% previous
• US Mar Core CPI (YoY) 3.8%, .7% forecast,3.8% previous
• Canada BoC Interest Rate Decision 5.00%,5.00% forecast, 5.00% previous
• US Feb Wholesale Inventories (MoM) 0.5% forecast,-0.3% previous
• US Feb Wholesale Trade Sales (MoM) 0.5%,-1.7% previous
• Distillate Fuel Production 0.033M, -0.208M previous
•US Gasoline Production 0.767M previous
•US Cushing Crude Oil Inventories -0.377M previous
•US Crude Oil Inventories 0.900M forecast,3.210M previous
Looking Ahead Economic Data(GMT)
•23:50 Japan Mar M3 Money Supply 2,140.3B previous
•23:50 Japan Foreign Investments in Japanese Stocks -441.3B previous
•23:50 Japan Foreign Bonds Buying -1,660.5B previous
•01:30 China Mar CPI (MoM) -0.5% forecast, 1.0% previous
•01:30 China Mar CPI (YoY) (Mar) 0.4% forecast,0.7% previous
•01:30 Australia Building Approvals (MoM) -1.9% forecast, -1.0% previous
Looking Ahead Events And Other Releases(GMT)
•No Events Ahead
Currency Forecast
EUR/USD: The euro declined against weaker dollar on Wednesday after the U.S. inflation data pushed out the expected timing of a first rate cut by the Federal Reserve to September from June. A Labor Department report showed the Consumer Price Index(CPI) rose 0.4% on a monthly basis in March, compared with the 0.3% increase expected by economists polled .Investors will now focus on Thursday's producer prices report for a clearer picture of March inflation. The dollar index, which measures the greenback's value against six major currencies, was up 1.1% at 105.22 .The euro fell 1.1% to $1.0737 . Immediate resistance can be seen at 1.0808(38.2%fib), an upside break can trigger rise towards 1.0871(50%fib).On the downside, immediate support is seen at 1.0737(23.6%fib), a break below could take the pair towards 1.0702 (Lower BB).
GBP/USD: Sterling declined against the dollar on Wednesday after data showed U.S. consumer prices rose more than expected in March, diminishing hopes for how much and how soon the Federal Reserve can cut interest rates. U.S. consumer prices increased more than expected in March as Americans continued to pay more for gasoline and rental housing, leading financial markets to anticipate that the Federal Reserve would delay cutting interest rates until September .The consumer price index rose 0.4% last month after advancing by the same margin in February, the Labor Department's Bureau of Labor Statistics said. Gasoline prices climbed 1.7% after increasing 3.8% in February. Shelter costs, which include rents, rose 0.4%, matching February's gain .Immediate resistance can be seen at 1.2580(38.2%fib), an upside break can trigger rise towards 1.2615(50%fib).On the downside, immediate support is seen at 1.2527(23.6%fib), a break below could take the pair towards 1.2512(Lower BB).
USD/CAD: The Canadian dollar weakened to a 4-1/2-month low against its U.S. counterpart on Wednesday as the combination of hot U.S. inflation data and a more dovish Bank of Canada led to a diverging outlook for U.S. and Canadian interest rates. The Canadian central bank kept its key interest rate unchanged at a near 23-year high of 5% but its governor, Tiff Macklem, said a cut in June was possible if a recent cooling trend in inflation is sustained. Canada's latest inflation report showed consumer prices easing to an annual rate of 2.8%, its slowest pace since June. The loonie was trading 0.8% lower at 1.3680 to the U.S. dollar , after touching its weakest intraday level since Nov. 24 at 1.3702. Immediate resistance can be seen at 1.3711 (23.6% fib), an upside break can trigger rise towards 1.3751(Nov 20th 2023 high).On the downside, immediate support is seen at 1.3677(Daily low), a break below could take the pair towards 1.33636(38.2%fib).
USD/JPY: The dollar rose higher against yen on Wednesday after U.S. inflation rose more than expected in March, pushing out the expected timing of a first rate cut to September from June. The big move in the yen came after data showed the Consumer Price Index (CPI) rose 0.4% on a monthly basis in March, compared with the 0.3% increase expected by economists polled by Reuters. On a year-on-year basis, the CPI increased 3.5% versus forecasts of a 3.4% growth. Following the CPI data, traders slashed bets the Federal Reserve will cut interest rates in June to 19%, from 57% late on Tuesday, according to the CME's FedWatch tool. Against the yen, the dollar was last up 0.7% at 152.895 yen , having touched 152.95, the highest since mid-1990. Strong resistance can be seen at 153.27(Higher BB), an upside break can trigger rise towards 153.77(23.6%fib).On the downside, immediate support is seen at 152.77 (38.2%fib), a break below could take the pair towards 152.09(50%fib).
Equities Recap
European shares staged a recovery after a knee-jerk reaction to a high U.S. inflation reading on Wednesday, with investors turning their focus to the European Central Bank's monetary policy decision on Thursday.
UK's benchmark FTSE 100 closed up by 0.33 percent, Germany's Dax closed up by 0.11 percent, France’s CAC closed down by 0.05 percent.
U.S. stocks tumbled to a lower close on Wednesday after hotter-than-expected inflation data threw cold water on hopes that the Federal Reserve would begin cutting interest rates as early as June.
Dow Jones closed down by 1.09%percent, S&P 500 closed down by 0.95% percent, Nasdaq was down by 0.84% percent.
Commodities Recap
Gold prices slipped from record-high levels on Wednesday as the U.S. dollar and Treasury yields firmed after a stronger-than-expected inflation print softened expectations of an early U.S. rate cut.
Spot gold fell 0.7% to $2,335.99 per ounce, as of 2:25 p.m. ET (1825 GMT).U.S. gold futures settled 0.6% lower at $2,348.4.
Oil prices settled up $1 on Wednesday after three sons of a Hamas leader were killed in an Israeli airstrike in the Gaza Strip, feeding worries that ceasefire talks might stall.
Brent crude futures settled up $1.06, or 1.2%, to $90.48 per barrel while U.S. West Texas Intermediate (WTI) crude futures settled up 98 cents, or 1.2%, to $86.21.
