Help
Post-CPI: more inflation and job data in focus
US consumer inflation data reinforced expectations that the Federal Reserve will maintain a hawkish stance
Stronger-than-expected UK GDP
Gold extended its recent rally
WTI crude oil faced downward pressure
The latest US consumer inflation data reinforced market expectations that the Federal Reserve will maintain its aggressive monetary policy, keeping interest rates high for an extended period. This outlook is supporting US bond yields and the dollar, but could also present challenges for gold, which faces headwinds from these rising yields. Traders are awaiting the US Producer Price Index (PPI) and unemployment claims data later today for further guidance.
Eurozone
The Eurodollar saw gains amid growing optimism for a potential ceasefire in Ukraine and easing concerns about aggressive US trade policies. Investors responded positively to a statement from Ireland’s foreign ministry, which suggested that Europe and the US could avoid further escalation in the trade war. Former President Trump’s announcement of a forthcoming executive order on reciprocal tariffs remains a key focal point.
UK Economic Data & GBP Strength
The UK’s preliminary GDP and industrial production figures exceeded expectations, prompting a 0.5% surge in GBP/USD. This stronger-than-expected economic data is boosting investor confidence in the pound, marking a positive development for the UK economy.
Commodities
Gold prices extended their recent bounce, benefiting from a pullback in US Treasury yields, which weakened the US dollar. The continued uncertainty surrounding US trade policies and concerns over a global trade war further supported gold’s safe-haven appeal. However, hotter-than-expected US consumer inflation figures kept expectations high for the Federal Reserve’s hawkish stance, which could limit gold’s upside.
Oil Market
WTI crude oil faced downward pressure, trading around $71.10 as early Asian trading began. US crude oil inventories rose by 4.07 million barrels last week, according to the EIA report, adding to bearish sentiment in the oil market. On the geopolitical front, discussions between President Trump, Putin, and Zelensky on ending the war in Ukraine continue to impact market sentiment.
