Joshua Mahony MSTA
Scope Markets
- Abundant data drives muddled markets
- Inflation up and growth down as US data diverges
- Mixed expectations for June FOMC meeting
Today has seen fundamentals take centre stage as a plethora of economic and corporate data combined with three central bank statements to produce a somewhat cloudy economic picture for traders. It is unsurprising that most central banks remain within a ‘wait and see’ mode given the relatively recent fears of a crude fuelled stock market crash. Interestingly, crude prices fared remarkably better than many of the other risk assets today, with WTI weathering the heavy stock market sell-off this morning.
Following on from yesterday’s relatively positive FOMC statement, today has provided something for both bulls and bears alike today, with US inflation rising in the face of deteriorating growth. The fact that we saw the Fed’s preferred measure of inflation (core PCE) unexpectedly spiked to 2.1% in Q1, will certainly heighten expectations that the Fed could act in June. However, with US growth now predicted to amount to just 0.5% on an annualised basis, it is clear that the notion that domestic consumption can drag the US forward is increasingly unrealistic.
With the US presidential election set for November, Janet Yellen will know that her window to act is relatively small. It is clear that not all of Janet Yellen’s ducks will be in a row come June and as such she may have to prioritise what is more important to her; growth, inflation or normalising monetary policy.
This material is a marketing communication and shall not in any case be construed as an investment advice, investment recommendation or presentation of an investment strategy. The marketing communication is prepared without taking into consideration the individual investors personal circumstances, investment experience or current financial situation. Any information contained therein in regards to past performance or future forecasts does not constitute a reliable indicator of future performance, as circumstances may change over time. Scope Markets shall not accept any responsibility for any losses of investors due to the use and the content of the abovementioned information. Please note that forex trading and trading in other leveraged products involves a significant level of risk and is not suitable for all investors.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.