Alpha Trade Daily market commentary

[AlphaTrade]

As expected, overnight trading was very volatile, as the core U.S. consumer price index rose only 0.1% month-on-month, and year-on-year growth fell to 5%, the lowest level since May 2021.

Previously, the month-on-month growth rate of this key indicator was expected to be 0.3%, and the year-on-year growth rate was expected to be 5.5%. The U.S. dollar index fell to 101.50, and the market sold the U.S. dollar. In addition, the minutes of the U.S. Federal Open Market Committee meeting were released, indicating that although interest rates will be raised by 25 basis points in May, interest rates may be cut in the second half of the year due to bond market factors.

What is noteworthy in the minutes of the U.S. Federal Open Market Committee is that although the Fed's main goal is to deal with inflation, there are definitely differences within the Fed because banking problems still exist in March and affect the decision-making of Fed members.

After the data was released, the price trend fluctuated sharply. Gold immediately rose from below 2010 US dollars to 2025 US dollars, and then gave up all the gains. However, it has maintained an upward trend since then, currently rising to 2024 US dollars. The US dollar index is once again close to 101.50 (the lowest daily since early February). closing price), it is also worth noting that the U.S. 2-year Treasury yield is below the key psychological level of 4%.

European markets opened, and it is expected that the stock market will remain strong and the US dollar will be weak this trading day.

The euro is testing 1.10 again, and the pound is above 1.25.

This morning, the UK released GDP data that increased by 0.1%, in line with expectations, and had less impact on the pound, because funds mainly flowed to the US dollar, which was negative for the pound.

Australia's employment data strengthened, with the number of new jobs increasing by 53,000 compared to expectations of 20,000, and the unemployment rate remaining unchanged at 3.6%, benefiting the Australian dollar.

Overall, the U.S. dollar among G10 currencies is in a disadvantageous situation, and this afternoon's data will still be closely watched.

At 1:30 pm GMT in the United States, the United States will release initial jobless claims and the producer price index.

Regarding the producer price index, it is expected to be 3.4, compared with the previous value of 4.4.

However, the "secondary inflation" data will be closely watched, with some volatility expected later today.

Spokespersons from the Bank of England and the Bank of Canada will speak, but the focus will be on the producer price index.