Support
S&P 500 at ATH, UK growth remains flat
Asian markets face selling pressure; Chinese indices weaken post CPI inflation data release
S&P 500 at record high
The UK economy showed no growth in April, with GDP remaining flat
Gold prices edged lower on Wednesday
Stock Market
U.S. stock markets closed yesterday's session with a strong performance, with the S&P 500 achieving a record high.
Asian markets are experiencing a selling pressure today. Chinese indices were notably weak following the release of CPI inflation data:
The Consumer Price Index (CPI) in China rose 0.3% year-over-year, falling short of the anticipated 0.4% increase
China's Producer Price Index (PPI) declined by 1.4% in May on an annual basis, which was slightly better than the forecasted 1.5%. The data today reflects the continuous soft consumer demand in China.
The Japanese Yen weakened as investors favored the U.S. Dollar ahead of the Federal Reserve's interest rate decision. However, the Yen might be supported by Japan's PPI increase by 2.4% year-over-year in May, surpassing market expectations of a 2.0% rise.
European Markets
The UK economy showed no growth in April, with GDP remaining flat after a 0.4% expansion in March, according to the Office for National Statistics (ONS). This outcome aligned with market expectations of zero growth. The Index of Services for April increased by 0.9% on a three-month rolling basis, compared to 0.7% in March and a forecast of 0.8%. Despite the mixed economic data, the Pound Sterling remained stable.
EUR/USD
The pair traded sideways below 1.0750.
The U.S. Consumer Price Index (CPI)
For the month of May US CPI is projected to increase by 3.4% year-over-year, matching April's growth rate. Core CPI inflation, which excludes volatile food and energy prices, is expected to decrease slightly from 3.6% in April to 3.5% in May. The inflation data could influence the value of the U.S. Dollar and expectations for a potential rate cut by the Federal Reserve in September. It is worthy to remember that the markets witnessed a drop in energy prices in May, which might translate to a downside surprise in the monthly headline CPI and core CPI figures. However, any significant reaction in the U.S. Dollar is likely to be limited ahead of the crucial Fed policy announcements later on Wednesday.
Gold
Gold prices edged lower on Wednesday, ending a two-day winning streak. Reduced expectations for a September rate cut by the Federal Reserve continue to support the U.S. Dollar, limiting the upside potential for gold.
