The market mood has soured as investors focus on inflation fears rather than signs of cooling down. The dollar is off the lows ahead of the US JOLTs figures and speeches from Fed officials. Cryptocurrencies are on the back foot.
China reported an increase of 6.8% in the annual Producer Price Index (PPI), higher than expected. Rises in commodity prices have been attributed to the leap, the highest since October 2017. On the other hand, the Consumer Price Index (CPI) remained tame due to increases in pork prices recorded in 2020.
Concerns of rising inflation have been spooking markets, weighing especially on US tech stocks. These fears replaced the calm following the downbeat Nonfarm Payrolls figures, which showed the US economy is not overheating. Tensions around mounting ahead of April’s CPI figures due out on Wednesday.
The German ZEW Economic Sentiment is projected to show an increase in business confidence as Europe advances with its vaccination campaign. UK Prime Minister Boris Johnson announced additional loosening of measures from Monday.
Federal Reserve officials, including John Williams, Lael Brainard, Mary Daly and Raphael Bostic are set to speak later in the day. They will likely repeat the bank’s message that inflation is temporary.
Pipeline: Gasoline supplies to the US East Coast are still strained due to a ransomware attack on Colonial Pipeline. The firm is working to resume normal activity by the end of the week, recovering from a more potentially originating from Russia.
Cryptocurrencies have been consolidating their losses after correcting lower from their highs on Monday. Bitcoin is changing hands at around $55,000, Ethereum is below $4,000, XRP under $1.50 while Dogecoin stands out by moving higher.
EUR/USD is falling towards 1.2120 and may later start a new correction to reach 1.2147, thus forming a new consolidation range around the latter level. Possibly, the pair may break the range to the downside and resume trading downwards with the target at 1.1860.
After extending the ascending wave up to 1.4148, GBPUSD is consolidating below this level. Possibly, today the pair may fall to reach 1.3847 and resume growing with the target at 1.4000.
USD/JPY is correcting towards 109.17 and may later start a new decline to break 108.66. After that, the instrument may continue trading downwards with the target at 107.60.
Legal disclaimer: The material does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instruments. UR Trade Fix Ltd accepts no responsibility for any use that may be made of these comments and for any consequences resulting in it. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. The analysis does not involve any specific investment objectives, financial situation and needs of any specific person who may receive it. Past performance does not constitute a reliable indicator of future results and future forecasts do not constitute a reliable indicator of future performance.
It has not been prepared in accordance with legal requirements designed to promote the independence of research, and as such it is considered to be marketing communication. Although we are not specifically constrained from dealing ahead of the publication of our research, we do not seek to take advantage of it before we provide it to our clients. We aim to establish, maintain and operate effective organizational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. We operate a policy of independence, which requires our employees to act in our clients’ best interests when providing our services