Momentum builds across markets as RBA and US CPI take centre stage

Important News this week

• Tue, 11th, 06:30 CET AU Cash Rate.
• Tue, 11th, 07:30 CET AU RBA Press Conference.
• Wed, 12th, 14:30 CET US Core Consumer Price Index.
• Thu, 13th, 08:00 CET UK Gross Domestic Product.
• Thu, 13th, 14:30 CET US Producer Price Index.

Momentum builds across markets as RBA and US CPI take centre stage

US equities continue to show positive momentum as the S&P 500 moves higher and the Nasdaq follows. The Nasdaq remains somewhat behind the S&P in relative terms, but a breakout above 29,900 could unlock another leg higher. Blue-chip strength and improving breadth suggest the current move is not limited to a handful of technology names. The DAX is also trading positively and could follow the US indices higher if its short-term breakout confirms. Overall, the technical picture points to a market still driven by positive risk sentiment and strong momentum.
Gold and Silver remain supported by the weaker US Dollar. Gold's strong breakout last week on the daily chart has released additional upside momentum, while continued Dollar weakness provides a favourable backdrop for precious metals. Strong equity markets are also supporting the broader risk-on environment, although the strength of the current move suggests momentum and positioning are playing an increasingly important role. Oil, meanwhile, has started the week weaker. The next move could depend heavily on developments around a potential US-Iran agreement. Crude remains well below last week's highs and is now testing its 50-day moving average on the weekly chart. A decisive break below this level could open the door to further downside.

Market talk

The focus this week shifts towards central banks and inflation data. The RBA rate decision is expected to leave rates unchanged, with falling Australian inflation reducing the need for further tightening. However, the accompanying statement will be important for AUD and broader risk sentiment. On Wednesday, US Core CPI could provide the next major catalyst for markets. A softer inflation reading could reinforce expectations for a less restrictive Fed and further pressure the US Dollar, potentially supporting equities and metals. A stronger result could have the opposite effect and challenge the current risk-on momentum.

Tendencies in the markets

• Equities positive, USD weak, BTC positive, ETH positive, oil weaker, Silver positive, Gold positive, JPY weak.