Daily Digest: Wednesday 15th May
USA
The headline data print for the session were the April US CPI prints. Month-on-Month figures fell 0.1 percentage points under analyst expectations moving lower than March’s figures to 0.3%, this was well received by markets with both equities and the US dollar pushing higher. Lower inflation is indicative of monetary policy successes, a subject of growing contention as the central bank moves to hold rates higher for longer against ongoing inflationary pressures. Year on Year figures provided no shock falling in line with expectations at 3.4%, 1.4 percentage points ahead of the central banks 2% inflation target. The bottom line of this print suggests that while caution is required in the short run, US inflation is moving in the right direction toward rate cuts in the medium term.
US equity indexes moved to the upside for a second session running as traders reacted positively to US CPI data. The Nasdaq 100 ($NDX) led gains for a second session running rising 273.88 points (1.49%) to 18,596.65, followed by the S&P 500 ($SPX) which rose 61.47 points (1.17%) to 5,308.15, and the Dow ($INDU) which rose 349.89 points (0.88%) to 39,908.
Europe
The UK’s FTSE 100 (FTSE) broke new record highs at its intraday peak breaching the 8,470 level during the morning before falling back to 8,445.80 marking a 17.67 point (0.21%) session gain. European indexes also continued higher with the STOXX 600 (€SXXP) rising 3.06 points (0.59%) to 524.71, whilst the French CAC (€FCHI) rose 14.20 points (0.17%) to 8,239.99, and the German DAX (€GDAXI) rose 152.94 points (0.82%) to 18,869.36.
Rest of the World
The Nikkei 225 (¥N225) extended gains prior to the release of US CPI data for April this afternoon. Nikkei prices rose 29.67 points (0.08%) to 38,385.73, reaching intraday peaks of 38,816.6 before a move lower into the close. The index now sits just under 3,000 points lower than its March highs as trading continues to head sideward as sentiment toward Japanese equities remains somewhat weakened. In terms of currencies, the JPY strengthened into the European session, however, took a move to the downside as of the US open falling to 155.733 against the USD as of 15:07 GMT.
The Shanghai Stock Exchange Composite Index (¥SSE) continued downward, falling 25.87 points (0.82%) to 3,119.90. The 3,140 to 3,142 area experienced another role reversal as support turned resistance with prices falling 23 points into the close. The Indian Nifty 50 (₹NSEI) moved 17.3 points (0.08%) lower to 22,200.55 as the index saw an end to a two session winning streak.
Commodities
US weekly crude oil inventories indicated a 2,500,000 barrel drawdown following last week’s 7.3 million barrel uptick. WTI crude prices moved 1% higher erasing most of Tuesday’s declines as prices crossed back above the $79 per barrel level. As of 21:00 GMT the WTI price per barrel was $79.12.
Gold traders benefitted from an easing of US monthly CPI figures, as of 21:00 GMT the commodity was trading some 1.59% higher priced at $2,399.70 per ounce. As noted before an easing of inflation implies that the relevant central bank will begin to ease restrictive monetary policy, such as higher rates in favour of allowing economic expansion. This is typically enacted through a reduction of interest rates, which due to yield impacts also lowers the opportunity costs investors face when holding gold, increasing the value of the asset as an investment instrument.
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