Today's Economic Spotlight

Market Overview

The dollar experienced a decline after Fed Chair Powell expressed that he doesn‘t see the Fed’s next move as a rate hike. 

US Apr Core PPI m/m rose by 0.5% which was 0.2% higher than expected.

Fed Chair Powell said, “Q1 in the US was notable for lack of inflation progress, and that told us that we'll need to be patient and let restrictive policy do its work.” He added, “I don't think it's likely that the next move would be a rate hike, but it is more likely that we will hold the policy rate where it is.”

Chair Jerome Powell also said that he expects U.S. inflation to continue declining through 2024, but followed that his confidence in that has fallen after prices rose more quickly than expected through the first quarter.

High inflation is a good economy for investors, but that is not true all the time, especially when the current system being governed today can be hyperinflationary. The drop in the dollar is caused by the doubt of the currencys real value as inflation is still rising despite the absence of economic boosting. It is also clear that the economy is looking for a probable boost as supposed by a rise in unemployment claims. 

April exports and imports are something to watch as well as it may tell a story of how the US is trying to combat inflation by attempting to sell their cash to other countries, which may further push US currency lower. 

We also see a rapid fall on the yields as people wait for the CPI results later this Wednesday. 

In the UK, we see the Claimant count change to 8.9k from the expected 13.9k which was a good indication of a growing labor economy in their country. 

ECB Governing Council member Wunsch said the ECB shouldn't rush into further interest rate cuts after a likely first cut in June as “wage pressures still persist, which is keeping inflation high in the services sector.”

GOLD - The GOLD has played out well into the day as we expect it to continue its rise beyond the 2365.443. The price is well supported above 2332.174.

SILVER -Silver closed on a positive, showing great potential for a continuation as the price has successfully held itself above 28.073 and is expected to break beyond 29.018. This consolidation is a good indication of orders gathering before a large buy.

DXY - We see a strong downward momentum on the DXY as we witness the price fall below 105.071 after a whipsaw. We expect this price to test 104.607 again and fall below it.

GBPUSD -Despite other analysts calls on this pair, we called it a bullish market. We see a strong return above 1.25740 and a good collection of orders below and slightly above the bottom of the daily range, allowing for further confirmations on the buying. With that, we continue to call this bullish and see the price potentially climbing toward the anchor point of the range.

AUDUSD -We see a strong rejection on the low after a whipsaw candle. Now, the price is settling above 0.66145 after a good collection of orders below it. We continue to view this pair to be bullish.

NZDUSD - There is a consolidation for the NZD while there is also a strong rejection for the bears. We continue to call this market bullish as we witness a good uptrend happening on the charts.

EURUSD -With the price closing in on the daily down trendline, we see strong volume and momentum on the buying side after testing 1.07757. We expect the price to continue rising and a strong break away from the trendline is a good indication of a change.

USDJPY -The Yen experiencing a calm before a storm？ We suspect BoJ intervention to continue however, we wait first for the price movement happening tomorrow with the news release. We call this market bearish as there is huge potential for market intervention to occur.

USDCHF - We can see a strong rejection for the topside of the market and a possible continuation for the bears as we see good volume and momentum for selling. The price has also collected orders and stalled for time outside of the daily upward channel.

USDCAD -There is strong movement down but prices are, overall, stagnant as it failed to go below 1.36052. Upcoming CPI results may be the gas this market requires to run where it must go.