Daily Digest: Tuesday 12th March
USA
US market activity was very much dictated by this afternoon’s CPI release. Core CPI for the month of February was 0.4%, 0.1 percentage points ahead of expectations while the year-on-year print was 3.2%, once again 0.1 percentage points ahead of analyst estimates. Off the back of hotter than expected inflation figures, the US dollar rose against the Great British pound to a rate of $1.279 by 19:45 (GMT), as analysts and traders alike believe that rate cuts have been ruled out for the Fed’s next meet. Demand for US bonds should remain high, as they continue to offer strong, competitive coupon rates. The print does suggest that the work of Chair Powell is not yet complete, as the FED faces obstacles on its path to the 2% inflation target.
US index futures rose off the back of the pre-market CPI print, with momentum carrying into the session. The Nasdaq 100 ($NDX) closed 1.49% up at 18,219.12, while the S&P 500 ($SPX) rose 1.12% to 5,175.27, and the Dow($INDU) trailed marginally behind rising 0.61% to 39,005.49.
After two consecutive sessions of declines, Nvidia’s ($NVDA) performance was in the spotlight as traders feared a continued sell-off may trigger a wider market reaction, however spurred on by Monday evenings positive Oracle ($ORCL) earnings call, shares rebounded. Through Tuesday’s session Nvidia shares rose 7.16% to $919.13, as investors will be once again anticipating the thought of prices breaking $1,000.
Europe
European market settled, following the US CPI release. The FTSE 100 (FTSE) had its strongest session in over a week, rising 1.02% to 7,747.81. This momentum was supported by UK average earnings data which showed a slower than expected (5.6%) increase in the cost of labour during the last three months, such data acts as a weak indicator of slower inflation within an economy, which will no doubt influence speculators and analysts to revise their BOE rate cut estimates.
On the continent, Tuesday marked a session of all-time highs, with the following indexes all breaking price records at their intraday highs. The STOXX 600 (€SXXP) rose a tidy 1% to 506.52, while the DAX (€GDAXI) rose 1.23% to 17,965.11, and the CAC (€FCHI) rose 0.84% to 8,087.48.
Cryptocurrencies
Bitcoin continued to rise throughout the day, breaking new highs at $73,000 before a pullback to the $71,000 level. As of 9pm GMT Bitcoin had fallen 1.49% since Monday priced at $71,037, $1,078 off yesterday’s price at 9pm GMT.
Ethereum had a slightly weaker day of trading, falling -2.06% after hitting 52-week highs earlier in the day at $4093.92. This price adjustment doesn’t seem to be anything major, but in terms of relative performance, Ethereum, alongside other altcoins, have shown lower returns throughout the day. Altcoins performances to note as of 20:00 (GMT) are Cardano (ADA) which has fallen around 4.5% on the day, Matic (Polygon) which has dropped 3%, and Chainlink (LINK) has fallen 2.41%. This has shown a slight alleviation of buying pressure, as prices consolidate at levels which for most cryptocurrencies are either all-time, or 52-week highs.
Commodities
Crude Oil erased all of yesterday’s gains through trading, as the market awaited a catalyst for larger price swings. However, just before 21:00 GMT a late rally pushed prices up, to a gain of 0.17% from Monday, a barrel of Crude now costing $78.06.
Gold ended an eight day streak of gains, falling 1.13% off the back of the US CPI print. Hotter than expected inflation figures will typically delay the rate cut process, as inflationary pressures remain strong within an economy, as noted yesterday a delay in rate cuts increases the opportunity cost investors face when holding Gold. Gold is now $2,163.90 per ounce.
What to watch
US Crude Oil Inventories
UK Month-on-Month GDP
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/
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