Russell Shor

Headline CPI for April came in a t 4.9% y/y, modestly lower than the 5% y/y expected. Core inflation which strips out volatile items such as food and energy printed at 5.5% y/y which was slightly lower than the previous 5.6% y/y. The month-on-month figures for headline and core were 0.4% respectively, which equates to 4.9% annualised. This is still much higher than the Fed’s target of 2%.

President Joe Biden and congressional leaders failed to reach a deal on raising the debt ceiling during a meeting at the White House on Tuesday. The leaders agreed to meet again at the end of the week to continue negotiations. The Treasury Department and budget experts have warned that a bill must be signed by early June to avoid the U.S. defaulting on its debts, which could have catastrophic economic…

According to a Federal Reserve report released on Monday, mid-sized institutions' turmoil led to banks tightening their lending standards to households and businesses, which could pose a threat to the US economic growth. The report, called the Senior Loan Officer Opinion survey, revealed that banks had made it tougher to get commercial and industrial loans, mortgages, home equity lines of credit, and credit cards. Respondents expect the situation to persist…

The UK’s headline inflation printed at 10.1% on 19 April, which was higher than the 9.8% forecast. Wage inflation, released the day before, was also higher than anticipated at 5.9% (vs 5.1%). This puts the BoE in a difficult position considering that it targets 2% inflation. It is lagging the other major economies in its attempts to control price pressures.

The NFP showed higher average hourly earnings and a lower unemployment rate than expected. The FOMC statement suggests a pause, the RBA delivered a surprise rate hike and the ECB increased rates by a smaller increment. This week we get CPI data on Wednesday and the BoE is expected to increase its official bank rate by 25bps. Disney is set to release results this week and Friday delivers UK GDP…

Technically, the cryptocurrency has found $30,000 to be a strong psychological level. Its latest decline is within a larger sideways pattern that has charted since the end of March. Bitcoin's current momentum is neutral, with the RSI currently oscillating around 50.

GER30 is trending up on a primary trend basis.

Live NFP trade - 05 May 2023

Despite reassurances from financial regulators and bankers such as Jamie Dimon that the banking system remains strong, uncertainty continues to impact the banking industry. Shares of PacWest Bank, a smaller regional lender, dropped by almost 50% after confirming reports that it was considering "strategic options," including the possibility of selling the company.

Gold prices are being propelled towards record highs by three key factors: economic uncertainty, falling bond yields, and a weaker US dollar. This year, central bank buying has further fuelled the rally. The flight to safety among investors has also contributed to increased demand for gold. Other precious metals, such as silver, have rallied even more recently. Falling bond yields, a weaker US dollar, and other signs of a softening…

FXCM's USDOLLAR daily chart shows the low volatility of the right shoulder. Its Bollinger bands are squeezing tightly. Markets cannot stay at rest for long, so the squeeze suggests an expansion of volatility may be expected soon.