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Quiet day in the US, eyes on Powell's speech
Unexpected remarks from Powell's speech could introduce market volatility today
US dollar is leading among major currencies.
Gold is trading positively, trading above $2,380.
Today's US economic calendar is light, with no major data releases expected.
Stock Market
Today’s US economic calendar is rather sparse, with no major data releases that might spark major market movements. However, a speech by Fed Chair Jerome Powell at 3:30 pm ET could keep some market participants engaged. While the address at Georgetown Law is not anticipated to cover monetary policy or the economic outlook, any unexpected remarks could still introduce some market volatility.
Currency Market
The US dollar is leading among major currencies, as 10-year US Treasury bond yield remains steady at around 4.4% while the Australian dollar is one of the most lagging currencies.
Key currency movements include:
- EUR/USD : April's inflation report showing headline inflation steady at 2.4% year-on-year, maintaining its lowest level in nearly three years.
- Services inflation and energy prices experienced a decline, while prices for food, alcohol, and tobacco saw slight increases.
- Despite the positive inflation report, the euro edged lower in trading, falling below 1.0900 as the USD strengthens, driven by comments from Federal Reserve officials emphasizing a prolonged period of high interest rates.
- Federal Reserve officials believe one positive inflation report isn't enough to alter the current trend.
- European Central Bank’s Isabel Schnabel warned against premature rate cuts, adding to the cautious tone.
Gold
Gold is trading positively today, maintaining a level above $2,380 after the recent rally has been fueled by softer US inflation data and disappointing retail sales figures from Wednesday, which have led to speculation that the Fed might be nearing a point where they could cut interest rates. Lower interest rates tend to make non-yielding assets like gold more attractive to investors.
