Daily Digest: Thursday 11th April
USA
US PPI data for March released earlier today, with figures coming in at 0.2%, 0.1 percentage points below analyst expectations. This can be interpreted as a positive signal in terms of the wider inflation narrative, with price increases occurring at a slower than expected rate. This print lends itself to the Fed’s cautious and awaiting stronger confidence indicators approach.
US indexes experienced a general shift to the upside, the Nasdaq 100 ($NDX) led gains rising 296.33 points (1.65%) to 18,3037.98, followed by the S&P 500 ($SPX) which rose 38.42 points (0.74%) to 5,199.06. The Dow ($INDU) struggled to build on this momentum, closing 2.43 points (0.01%) lower than its open at 38,549.08.
Europe
Trader attention throughout the European session focused on the ECB, as the governing council met for their April meet. The meeting concluded with a decision to hold the Eurozone interest rate at 4.5%, in line with analyst expectations. The ECB has upheld a cautious narrative toward cuts, as inflationary pressures remain ever present.
The UK’s FTSE 100 (FTSE) traded 37.41 points (0.47%) lower at 7,923.80. The sessions largest declines were observed across the banking sector, as the London listed shares of Lloyd’s (LLOY.L) fell 4.63%, Barclay’s (BARC.L) fell 3.08%, and HSBC (HSBA.L) fell 2.49%. The index tested yesterday’s closing level around 7,960, before momentum pushed prices back toward the close.
Mainland European markets followed a similar direction, the STOXX 600 (€SXXP) falling 2.25 points (0.44%) to 504.34. For the second consecutive session traders have met significant resistance at the 507 level, which ultimately forced today’s move to the downside. In terms of nation specific indexes the German DAX (€GDAXI) fell 148.04 points (0.82%) to 17,949.26, and French CAC (€FCHI) fell 21.64 points (0.27%) to 8,023.74.
Rest of the World
The Japanese Nikkei 225 (¥N225) continued to fall through Thursday’s session, with direction driven by Wednesday’s hotter than expected inflation prints. The index fell 139.18 points (0.35%) to 39,442.63. The main downward moves occured within the first hour of trading, with prices gapping down to the 39,062 before a rebound above the 39,400 level. Despite a weakening of key macroeconomic fundamentals, index performance should still be supported by the ongoing depreciation of the Yen, as the currency battles a strengthening US Dollar. Yesterday’s CPI release pushed the USDJPY pair beyond the highly significant 152 level, with prices reaching intraday highs of 153.292 around 09:50 GMT. Central intervention is increasingly likely, however, remains contingent on the BOJ’s ability to counteract a rising Dollar, which has continued to benefit from ongoing inflationary pressures and subsequent delays to analyst rate cut expectations.
After breaking new April lows on Wednesday, China’s Shanghai Stock Exchange Composite Index (¥SSE) managed a move to the upside, rising 6.91 points (0.23%) to 3,034.25. The 3,033 level once again played a crucial role in terms of technical analysis, as traders managed to break through the newly established resistance into the close. China’s year-on-year CPI release was the likely cause of a change in direction, with inflation figures falling 0.3 percentage points lower than expectations at 0.1%, indicating a slowdown in consumer price inflation across China. It is likely that CPI data will remain a key consideration for traders over the next week, as despite figures indicating successful inflation controls, there are deflationary undertones.
Upside momentum on the Nifty 50 (₹NSEI) has continued with India’s benchmark index breaking new highs at its intraday peak. Traders have remained unfazed by Tuesday’s consolidation with prices rising 11.05 points (0.49%) to 22,753.80. The index reached the 22,768 level, however, was ultimately rejected with the index exercising support at 22,730. Positive sentiment toward Indian equities remains strong, built upon improved economic growth outlooks. India has remained the fasted growing economy, outpacing other key emerging economies, including China in terms of GDP expansion. Furthermore, the environment for investment remains far more accommodative for foreign institutions and investors seeking exposure to EM and high growth markets.
Commodities
WTI Crude prices fell throughout Thursday, despite a continuation of geopolitical tensions across the Middle East, which have driven demand side concerns throughout the last month. As of 21:00 GMT prices had fallen 0.72% to $85.61 per barrel.
The ECB’s interest rate decision contributed toward the direction of Gold prices through Thursday as policy markers signalled a willingness to cut rates, given that coming inflation prints indicate the central bank remains on track toward its 2% target rate. As of 21:00 GMT prices had risen 1.801% to $2,390.80 per ounce.
Sources:
https://uk.finance.yahoo.com/world-indices/
https://uk.finance.yahoo.com/commodities
https://www.londonstockexchange.com/indices/ftse-100
https://www.binance.com/en-GB/price/bitcoin
https://www.binance.com/en-GB/price/ethereum
https://qontigo.com/index/sxxp/
Stock Market Activity Today & Latest Stock Market Trends | Nasdaq
https://coinmarketcap.com/charts/#market-cap
https://www.forexfactory.com
Definitions:
YoY - Year on Year, or, Year over Year
MoM - Month on Month, or, Month over Month
QoQ - Quarter on Quarter, or, Quarter over Quarter
ECB - European Central Bank
BOJ - Bank of Japan
Fed - Federal Reserve
BOE - Bank of England
SNB - Swiss National Bank
DOJ - Department of Justice