Markets:
- S&P 500 down 11 points to 5,297 after hitting record high
- The Dow Jones Industrial Average hits 40,000 for the first time
- WTI crude oil up 66 cents to $79.30
- US 10-year yields up 2 basis points to 4.38%
- Gold down $8 to $2,378
- USD leads, CHF lags behind
It’s hard to find anything to hang price action on today. Yesterday there was real enthusiasm for risk assets following the CPI and retail sales and this continued into early share trading, but there were hiccups elsewhere. Concerns began in bonds and currencies, as yields rose, led by the front end, and the dollar climbed.
Granted, these moves have been modest, but they highlight a market that is not yet ready to give up in the face of high inflation in the United States. The data was generally weaker, but the market may have picked import/export prices as hot and detected some pipeline inflation there. Initial unemployment claims also remain at historically good levels.
Or perhaps it was the Fed’s rhetoric that weighed as officials insisted on a higher long-term stance, leading some to wonder whether two cuts this year might be too big to accommodate. . On this front, the 51 basis points of easing that were incorporated yesterday have faded. at 46 basis points.
USD/JPY made a strong recovery from yesterday’s low of 153.60 and is now almost 200 pips higher, adding 53 more today, or recovering more than half of the inspired loss by the CPI.
The Euro remains interesting on several fronts and in particular EUR/CHF, as this pair appears to be reaching a one-year high. The EUR/USD chart is also worth watching as it shows some strength.
But overall, today, the mode has retreated after a nice series of risky transactions. Economic data remains the key to the game.
cnbctv18-forexlive
