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Inflation

GBP/USD shrugs despite sparkling retail salesThe British pound is slightly lower on Friday. GBP/USD is trading at 1.2636 early in the North American session, down 0.17% on the day. UK retail sales jumped 2.9% m/m in May, an impressive turnaround from the revised 1.8% decline in April and blowing past the market estimate of 1.8%. This was the highest level since January. Yearly, retail sales climbed 1.3%, rebounding from a revised 2.3% drop in April and above the market estimate of -0.9%. This marked the sharpest gain since March 2022. The increase in consumer spending was felt across the economy, as rising wages have helped consumers withstand weak economic growth and high interest rates. The weather was a key factor, as a very wet April dampened retail sales, which rebounded in what was the warmest May on record. UK GfK Consumer Confidence rose to -14 in June, up from -17 in May and above the market estimate of -17. Consumers remain pessimistic but the confidence indicator has climbed for three straight months and hit its highest level since November 2021. The Bank of England stayed on the sidelines on Thursday, keeping the benchmark rate of 5.25% unchanged for an eighth straight time. The BoE upgraded its growth forecast for the second quarter and that could mean an August rate cut, which would be the first cut since the BoE embarked on its steep rate-hike cycle to tame high inflation. Earlier in the week, inflation dropped to 2%, the BoE’s target, for the first time in almost three years. The fly in the ointment is that service inflation is running at 5.7% and will have to come down before the BoE cuts rates. GBP/USD is testing support at 1.2633. Below, there is support at 1.2608 There is resistance at 1.2679 and 1.2704
by OANDA
GBP/USD lower as BoE holds ratesThe British pound is lower on Thursday. GBP/USD is trading at 1.2683 in the North American session at the time of writing, down 0.29% on the day. The Bank of England held rates at today’s meeting, as expected. There are no releases out of the US today. There were no surprises as the Bank of England maintained interest rates at today’s meeting. The BoE kept the benchmark rate unchanged at 5.25% for a eighth straight time. Ahead of the meeting, the money markets had priced the likelihood of a hold at 95%. The Monetary Policy Committee voted 7-2 in favor of a hold, with two members voting for a quarter-point cut. This result was expected by the markets and was a repeat of the vote at the previous meeting in May. This is a 16-year high but the central bank remains reluctant to cut rates due to concerns over inflation. The good news was that the inflation rate fell to 2% in May, the first time that the BoE has met its 2% target in almost three years. However, the BoE was less happy about services inflation, which remained extremely high at 5.7% in May. This was down slightly from 5.9% in the previous report but above the market forecast of 5.5%. The rate statement noted that services inflation remained high. Political considerations likely played a role in the BoE’s decision. The UK is in the midst of an election campaign and is keen not to be seen as interfering in the election. A rate cut at this sensitive time might have been viewed as helping Prime Minister Sunak, whose Conservative Party is trailing badly in opinion polls. Had the BoE trimmed rates, Sunak would have been quick to take credit for the cut and saying it proved that the government’s economic policy was working. Unfortunately for Sunak, the next BoE meeting isn’t till after the election in August. GBP/USD pushed below support at 1.2717 and 1.2695 earlier and is putting pressure on support at 1.2670 There is resistance at 1.2742 and 1.2764
by OANDA
BoE Rate Decision: Pound's Fate Hangs in the Balance – Rally or With the Bank of England's (BoE) interest rate decision on the horizon, let's examine recent developments in GBPUSD, primarily through the lens of fundamental analysis. Chart analysis reveals that recent GBPUSD fluctuations have been largely influenced by the US dollar's strength, fueled by the Fed's increasingly hawkish stance. Although a September rate cut by the Fed is still widely anticipated, recent commentary and revised dot plot projections suggest a more cautious approach, bolstering the dollar's bullish momentum. US Dollar Strength: Not Just About Rate Cuts The US dollar's resilience, despite the expected rate cut, can be attributed to several factors. The September cut was already priced into the market, and the Fed's surprisingly hawkish tone has prompted a reassessment of the likelihood of further easing. Until clear signs of cooling inflation and a looser labor market emerge in the US, the dollar's upward trajectory is likely to persist. The CME FedWatch Tool, which forecasts rate movements based on fed funds futures trading data, currently shows a higher probability of a rate cut in September than before the recent CPI data release. This suggests that the market is still weighing the Fed's intentions carefully. UK Inflation on Target: A Dovish BoE Unlikely Yesterday's UK inflation data, which met the BoE's 2% target, might not lead to an immediate shift towards a dovish monetary policy. Market consensus anticipates a rate hold at 5.25% in today's BoE meeting (most analysts and economists predict the first rate cut to occur in August). However, the BoE's forward guidance will be critical. Hawkish commentary regarding inflation, robust wage growth, or a tight labor market could temporarily strengthen the pound. Short-Term & Mid-Term Outlook: A Bullish Pound Faces Headwinds In the short term, a hawkish BoE could potentially drive GBPUSD back towards the 1.28 level. However, a sustained bullish momentum is unlikely, with a mid-term target of 1.26 seeming more plausible. This is because even with a hawkish stance, the UK's inflation and labor market appear better positioned for easing compared to the US, suggesting the BoE may be forced to adopt a dovish stance sooner than the Fed.
by UnknownUnicorn13053793
USD/CHF – flat ahead of SNB rate decisionThe Swiss franc is almost unchanged on Wednesday. USD/CHF is trading at 0.8838 in the North American session, down 0.04% on the day. Switzerland’s central bank will announce its rate decision on Thursday and the markets are on edge. Will the Swiss National Bank lower rates or hold? The SNB last met in March and that meeting was memorable, as policy makers shocked the markets with a quarter-point cut, bringing the cash rate to 1.50%. Investors had expected the SNB to continue to maintain rates at the March 21st meeting, but the SNB decided to respond to declines in inflation and growth and became the first major central bank to lower rates this year. The Swiss franc took a bath and fell 1.2% against the US dollar the day of the March meeting, its second-to-worst daily performance this year. The Swissie proceeded to lose more ground in the following weeks but has recovered almost completely. Economists are split 50/50 on whether the SNB will cut on Thursday, while the money markets have cut expectations of a rate cut to 60%, compared to 80% just one month ago. The ultra-cautious SNB has been mum, with no public comments from Bank policy makers over the past three weeks, which has only intensified the suspense. Inflation has been steady in the upper half of the SNB’s target range of 0% to 2% and Swiss growth has been steady, which would support the case to hold rates. On the other hand, exports have been weak and the Swiss franc has appreciated 3.3% against the US dollar since May 30th. A rate cut by the SNB could weigh on the Swiss franc and make Swiss exports more attractive on world markets. The uncertainty ahead of the SNB meeting makes this a live meeting and could translate into volatility from the Swiss franc on Thursday. There is support at 0.8809 and 0.8777 0.8860 and 0.8892 are the next resistance lines
by OANDA
Bracing for UK Inflation & BOE decision In the UK, inflation data expected tomorrow is projected to fall to 2% in May, down from 2.3% in April. This would mark the first time since April 2021 that inflation has hit the Bank of England’s 2% target. However, a positive inflation report is unlikely to result in a rate cut at Thursday’s meeting, especially with an election on July 4th. Markets are pricing in an initial rate cut for August. Technically, the pound/dollar has been trading sideways recently. With GBP/USD breaking below 1.2700, the first support level is at 1.2667, the May 24 low. For any more downside, the next target could be the 100-day moving average (DMA) at 1.2643, followed by 1.2600. Limiting the downside could be the recently released US retail sales data. US retail sales grew by a modest 0.1% in May, below the expected 0.2% gain. Excluding autos, retail sales fell by 0.1%. Additionally, April retail sales were revised down from flat to a 0.2% decline.
by BlackBull_Markets
Euro falls to six-week highThe euro has extended its losses on Friday. EUR/USD is trading at 1.0675 in the European session, down 0.59% on the day. The euro is down 1.17% this week and has dropped to its lowest level since May 1st. France’s inflation level fell to zero in May, confirming the preliminary estimate and down from the 0.5% gain in April. France is the eurozone’s second-largest economy and the downtrend in inflation will be welcome news to the European Central Bank. The central bank delivered a rate cut last week, the first since its rate-tightening cycle began two years ago. ECB policymakers will be closely monitoring inflation data and could consider another cut in the fall if inflation continues to decline towards the 2% target. Eurozone inflation rose 2.4% in April, unchanged from March. ECB President Lagarde speaks at an event in Croatia later on Friday and investors will be looking for hints as to the ECB’s planned rate path. Another cut in July is unlikely but a signal from Lagarde that additional rate cuts are one the table could boost the euro. In the US, the producer price index rose 0.2%, below the April reading of 0.5% and lower than the market estimate of 0.1%. Yearly, PPI ticked lower to 2.2%, down from a revised 2.3% in March and below the market estimate of 2.5%. The soft PPI data follows the May CPI report which also showed that inflation on the decline. The downtrend in these two inflation reports have raised expectations of a September rate cut, with a 61% of a quarter-point cut currently, compared to 46% just a week ago, according to CME’s FedWatch. EUR/USD pushed below support at 1.0709 and is testing support at 1.0679. Below, there is support at 1.0629 1.0763 and 1.0793 are the next resistance lines
by OANDA
Slowing Inflation Data Brings Positive Price Action to Bitcoin The US CPI remained flat in May, beating forecasts and lifting bitcoin prices by nearly 4% on Wednesday: But bitcoin prices quickly retreated on Thursday as traders grappled with the possibility of just one rate cut by the Federal Reserve by the end of the year. Trump voices support for Bitcoin mining at Mar-a-Lago: President Biden’s campaign also consulted the crypto industry on his digital asset policy. Gensler confirms spot ether ETFs are coming soon: In a Senate Banking hearing on Thursday, SEC chairman Gary Gensler said he expects spot ether ETFs will begin trading this summer. GameStop's stock drops 12%, impacting related meme tokens: The dip comes after recent highs and announcements of new share sales and declining quarterly sales. HSBC Bank's China branch begins offering e-CNY services to corporate clients: It’s the first foreign bank to support the digital yuan to facilitate transactions and asset management. The ZKsync Association will airdrop 3.675 billion ZK tokens next week: Early users and contributors will receive the distributions, with claims available until January 2025. 🗝️ Topic of the Week: Crypto and Retirement Accounts: 401ks and IRAs 👉 Read more here
GEMINI:BTCUSD
by Gemini
BTC DAILY: Inflation rates, CPI and FOMC todayBitcoin cleared nearest liquidity pool under ~66155 and closed above that level which might be a swing failure - bullish pattern. But too early to confirm that. Target for that bounce is May VAH zone + year VWAP VAH around 69.2k (for the wicks). These are conservative targets that assume rejection and pull back to 67600 at least with further consolidation. Today CPI and Inflation rates at 12.30 UTC and FOMC at 18 UTC time. That always cause extra volatility. As I wrote before, there was no correlation with global markets in this crypto dump. Stocks actually performed pretty well yesterday. And Dollar Index so far follows the drawn path I've shared two days ago. So I don't see any sufficient bearish pressure on BTC outside of crypto world. Bullish scenario comes into play if BTC find acceptance above year VWAP VAH. Nearest liquidity pools: above - 68256 / 68840 / 70400 / 72240 below - 66905 / 65760 / 64233 / 59960 Lines on the chart: 🔸73881 - ATH 🔸71363 - March close 🔸70393 - last W VAH 🔸69667 - week close 🔸68540 - last week close 🔸67577 - May close 🔸66239 - week close 🔸64025 - last April week close Trend: D ▶️ W 🔼 M 🔼 🤑 F&G: 72 < 74 < 72 < 75 < 72
by WiseAnalyze
BTCUSD to reclaim highs and more?Highlighting the inverse relationship between the DXY (yellow line) and the BTCUSD. Potential weakness on the DXY tonight could see the BTCUSD continue its bounce from the support level of 66,000 (also formed by the 38.2% Fibonacci retracement level from the longer term) up toward the previous high of 72,000. If the price breaks above the resistance level, significant upside could be anticipated with the next target profit level around the 74,500 area
BITSTAMP:BTCUSDLong
by JinDao_Tai
1
GBPUSD H4 (Prior to US CPI & FOMC)Considering the scenario that the CPI data is released higher and/or the FOMC presents a hawkish tone, this would mean that the US interest rates could stay high for longer. This would bring significant strength to the DXY which could see massive downside for the GBPUSD. However, the GBPUSD has developed a strong support along the 1.27 price level, formed by several swing points and the 23.60% Fibonacci retracement level. In DXY strength, look for the GBPUSD to break the bullish trend line and the support level before anticipating further downside toward the 61.8% Fibonacci retracement level and support area of 1.25
Short
by JinDao_Tai
USDCAD H4 (Prior to US CPI & FOMC)USDCAD has been trading within the range of 1.3590 and 1.3780 since the start of May 2024. With the price action indicating a potential rejection of the resistance level, weakness in the DXY could see the USDCAD continue to reverse lower. A consideration as a trigger for the reversal is if the price breaks through the 23.60% Fibonacci retracement level and the previous swing level at 1.3735. However, the downside is likely to be limited at the 1.3590 price level, due to the 50% and 38.6% Fibonacci retracement level from the shorter and longer term move forming a confluence with the bullish trendline around the support area.
Short
by JinDao_Tai
How will Stocks React to Inflation?The stock market's reaction to an inflation trend always involves a delay. Based on studies of the inflation trend, this delay is approximately 6 months. How about the inflation data month by month? Micro E-Mini Nasdaq Ticker: MNQ Minimum fluctuation: 0.25 index points = $0.50 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CME_MINI:NQ1!Education
by konhow
2
Golden, Green, or ScarletHey There, Welcome Back. Today we analyze the evergreen hedge commodity. - If you are an Indian, Given that Gold rallied almost 17% in a very short span You must be quite happy. We Indians love gold. Especially, the ladies in our homes. - The chart of Gold Futures is showing something interesting. The price took quite a rejection from the recent support zone. - If this rejection holds, we may see a correction/retracement. - On the other hand, we may just see a consolidation phase (Which is usual after a good rally) - Only future price action will tell what's what but in the meantime, here are a few rumors/updates to know in the vicinity of Gold (Some are just rumors so take it with a pinch of salt) : - BRICS Bloc is rumored to introduce a gold-backed currency that will any day be more reliable than the flat currency every other country has. - US is battling Economy slowdown and recession. The United States has the world's highest national debt with $30.1 trillion owed to creditors as of the first quarter of 2023- Al Jazeera. - The US Credit ratings were reduced to AA+ from the elite AAA - If the BRICS Currency comes out, 85% of the global population will stop using US Dollars for intra trades settlement (BRICS Nations) - Russia is out of the SWIFT System meaning USD Dealings are off the table. That reduces the demand for dollars. - Saudi Arabia is rumored to join BRICS. Also, for the first time, they are considering accepting other currencies besides the Dollar for Oil trades. This may hugely impact the almighty dollar. - In the calendar year 2022, central banks around the world purchased a record 1,136 tonnes of gold. - RBI’s hoard of gold is now almost 800 tonnes - China’s Central Bank is accumulating gold for straight 9 months - Gold may soon be the King once again. Does that mean we will start buying gold at any given price? Absolutely Not. But we will surely keep a check on the global news, the price action, and our overall asset allocations. Have Requests, Questions, or Suggestions? DM us or comment below.👇 ⚠️Disclaimer: We are not registered advisors. The views expressed here are merely personal opinions. Irrespective of the language used, Nothing mentioned here should be considered as advice or recommendation. Please consult with your financial advisors before making any investment decisions. Like everybody else, we too can be wrong at times ✌🏻
MCX:GOLD1!
by TheChartereds
Inflation vs. Fed Decision: What's Driving Markets Next Week? While closely related, US inflation and the Federal Reserve's interest rate decisions can impact the market with varying intensity. The Fed aims to avoid surprising the market, whereas inflation is unpredictable. Consequently, the market is confident that the Fed will neither hike nor cut rates at the upcoming meeting. However, inflation forecasts are often inaccurate. According to TradingEconomics, US inflation year-over-year is forecast to have stalled at 3.4%. Last week, the personal consumption expenditures (PCE) price index remained steady at 2.8% in April for the second month in a row. This stability suggests that inflation may persist longer than expected, raising doubts about how soon the Fed can cut interest rates. Traders currently see a 68% chance that the Fed will cut rates in September. Interestingly, today the European Central Bank (ECB) announced a 0.25 percentage point cut in borrowing rates for the eurozone, the first decrease since 2019. The ECB’s main refinancing rate is now 4.25%, down from a record high of 4.50%. With this rate reduction, the ECB follows the lead of the Swiss National Bank, Sweden’s Riksbank, and the Bank of Canada. For the exact date and time of these major economic events, import the BlackBull Markets Economic Calendar to receive alerts directly in your email inbox.
by BlackBull_Markets
Inverted Yield of 2022 Explained - Till TodayFor our housing loan, many of us, if you are in your 30s today and all the way to 70 years of age, will likely have chosen floating or short-term loan rates rather than longer-term loan rates. However, everything changed in 2022. Now, we are more likely to choose longer-term loan rates over floating rates. Why? Because today, longer-term loan rates are lower than floating rates. This phenomenon is called an inverted yield curve. In the 70s and 80s, there was also a period of inverted yields, and different markets moved accordingly as expected. Today, we are seeing an inverted yield once again, and the same markets are moving in a manner similar to those in the 70s and 80s. We will do a comparison between the 70s and today’s inverted yield. Please let me know what opportunities you see after this tutorial. 2 Year Yield Futures Ticker: 2YY Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00 10 Year Yield Futures Ticker: 10Y Minimum fluctuation: 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CBOT_MINI:2YY1!Long
by konhow
2
Swiss franc climbing, eyes Swiss inflationSwiss franc has extended its gains on Monday. USD/CHF is trading at 0.8961 in the North American session, down 0.68%. The Swiss franc posted its strong weekly gain of the year last week, rising 1.35%. The Swissie jumped over 1% on Thursday after Swiss National Bank President Jordan hinted that the central bank could intervene in the currency markets in order to keep a lid on inflation. Thomas’ comments gave a boost to the Swiss currency, which has sagged in 2024. Even with last week’s strong gains, however, the Swiss franc has plunged 7.1% against the US dollar. The Swiss franc weakened after the Swiss National Bank unexpectedly lowered interest rates in March. A weaker Swiss franc helped make Swiss exports more competitive on world markets, but the currency’s sharp descent may have become too much of a good thing, as it is feeding inflation and raising concerns at the central bank. The Swiss franc’s downswing has had a strong impact on market expectations for a rate cut at the June 28th meeting. In early May, swap markets priced a 66% probability of a rate cut, which has fallen to around 40%. The SNB isn’t likely to make good on Jordan's threat to buy Swiss francs unless the currency continues to show a sharp depreciation, but last week’s jump shows how comments from central bankers can cause sharp swings in the currency markets. Switzerland releases May CPI on Tuesday. This is the final economic release prior to the central bank’s rate meeting and could be a major factor in the SNB’s rate decision. Swiss CPI is expected to tick up to 0.4% m/m in May, compared to 0.3% in April. USD/CHF is testing support 0.8966. Below, there is support at 0.8909 0.9061 and 0.9118 are the next resistance lines
by OANDA
The Dollar Remains On TrackThe dollar is right on its projected path as expected. Inflation has prevented the Fed from lowering rates at least once. Can we expect a rate drop before the end of the year? My guess is that even with a bit of inflation showing the Fed will drop rates at least once. There are several reasons for my conclusion here not least of which are weakening economic indications which are too numerous to list for the purposes of this post but some of which are the collapsing car market, cc default rates exploding, commercial real estate vacancies still increasing, and many other factors and lead indicators. There is also the fact that the Fed was initially expected to drop rates 3 times in 2024. Failing to drop at least once before the end of the year would have psychological ramifications on the market that potentially could be disastrous. And finally, there is the fun fact that historically the Fed has always adjusted rates in an election year. There is only one exception to this rule …2012. Based upon this statistic alone we can see that the probability of a rate adjustment this year is high. And we know that if there is an adjustment, it will almost certainly be to the downside as that is what has been expected all along. Any anomaly to expectations would cause chaos and catastrophe in the markets. All this being said we can then continue to expect the dollar to travel its expected pathway …down. 103.5 is the next support. Below that is that pink ascending trendline around 102 and rising.
TVC:DXYShort
by stewdamus
EUR/USD shrugs as Eurozone CPI higher than expectedThe euro has edged higher after eurozone CPI was hotter than anticipated. EUR/USD is trading at 1.0848 in the European session, up 0.27% on the day. The inflation rate in the eurozone surprised the markets with a hotter-than-expected release for May. The headline figure rose to 2.6% y/y, up from 2.4% in each of the past two months and higher than the market estimate of 2.5%. Energy and services prices accelerated while food inflation slowed slightly. Core CPI climbed to 2.9% in May, up from 2.7% in April and above the market estimate of 2.8%. Will the hot inflation report put a dent in the European Central Bank’s plan to lower interest rates next week? Probably not, as the ECB has strongly signaled it will cut rates and a change of heart now would not be viewed kindly by the markets. The May inflation report was higher than expected but the gain was partially attributable to one-off factors, such as a change in German public transit costs. Still, May inflation was higher in Germany, France and Spain, an indication that the path to the ECB’s 2% target will be bumpy. The ECB has slashed inflation from a high of 10.6% in 2022 to below 3% and a rate cut will provide relief to consumers and also provide a boost to the sluggish eurozone economy. In the US, the week wraps up with the Personal Consumption Expenditure price index, which is the Federal Reserve’s favorite inflation indicator. The indicator is expected to remain unchanged at 2.7% y/y and 0.3% m/m, respectively. An unexpected reading could trigger some movement from EUR/USD in the North American session. EUR/USD is putting pressure on resistance at 1.0855. Above, there is resistance at 1.0879 1.0822 and 1.0798 are the next support levels
by OANDA