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The Morning Wrap

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Indices on Wall Street ended yesterday’s session in mixed sentiment. Investor sentiment was weighed down primarily by uncertainty over the US CPI inflation reading scheduled for today, which will be one of the final key clues creating the FOMC’s decision at its next meeting in May. 

The S&P 500 ended trading unchanged on a daily basis. The Dow Jones gained 0.29%, and the Russell 2000 small-cap index gained 0.8%. The Nasdaq index of technology companies was the weakest performer, losing 0.43%.

Asia-Pacific indices traded mostly higher – the Nikkei gained 0.6%, the S&P/ASX 200 gained 0.4%, the Kospi gained 0.2% and the Nifty 50 traded 0.15% higher.

In the FX market, we are seeing capital outflows to the currencies of the antipodes, namely the New Zealand dollar and the Australian dollar. The EURUSD pair is trading slightly up and testing the resistance zone at 1.093. At the moment, the Japanese yen and the US dollar are experiencing the biggest declines.

Federal Reserve and ECB bankers have warned that we may see elevated inflationary pressures all the time, current inflation targets should remain in place, and higher interest rates may be present for an extended period.

Wells Fargo warned that the S&P500 index could experience a near 10% correction due to deteriorating economic conditions in the US.

Elon Musk stated that Twitter will be a profitable business as early as next quarter.

Yields on Chinese 10-year Treasury bonds fell to their lowest levels since November 2022, due to increased expectations of continued interest rate cuts in the country. Yesterday, China reported a sharp decline in inflation growth to 0.7%, compared to an earlier reading of 1%.

An index measuring construction activity in China in March reached its highest level in more than a decade.

Deutsche Bank analysts expect Bank of Japan Governor Ueda to end the YCC in 2 weeks. 

Australian weekly consumer confidence surprised on the upside with a reading of 79.3 (previously 78.2).

The lower house of the Swiss parliament rejects a CHF 109 billion bailout package for Credit Suisse.

Energy commodities are trading at mixed levels this morning. WTI crude oil is gaining 0.21%, while natural gas is off 1.0%.

Gold continues its recent upward momentum and is currently breaking out above the 2019 USD level. 

There is weak sentiment in the cryptocurrency market. Bitcoin is currently losing nearly 1%, and Ethereum is losing 1.5%. 

Heatmapa zmienności na rynku FX w chwili obecnej. Źródło: xStation 5

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