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Citigroup: Raised its target price for McDonalds (MCD.N) to $381 from $373 previously.Polish Energy Minister: Poland is ready to support EU member states in continuing to purchase Russian energy.Susquehanna International: Raised the target price for Micron Technology (MU.O) to $200, from $160 previously.Gold options data show that before the Feds decision, the Put/Call ratio continued to rise but was still below 1, indicating that bullish expectations still prevailed, but short- and medium-term precautions against pullbacks increased; the transaction ratio returned to around 0.5, the short-term short-selling momentum weakened, and the market was more inclined to oscillate or slowly rise. The high probability range rose from 15% to nearly 19%, and the slope became steeper, especially above 3680-3700 (spot price of about 3673-3693), indicating that "high prices mean strong waves", and once it breaks through, it is easy to trigger a rapid saw-saw and a false breakthrough. Strategically, pay attention to the gains and losses of 3680-3700: if the position ratio is greater than 1 and the implied volatility continues to rise and approaches 20%, tend to reduce positions at highs and defend retreat; if the transaction ratio continues to weaken toOn September 17th, ahead of the Federal Reserves interest rate decision (widely expected to be a 25 basis point rate cut), long-term U.S. Treasury yields edged lower, with the 10-year yield approaching 4%. Short-term Treasury yields were largely unchanged, as the market has already priced in a rate cut. However, if the decision includes any comments on future interest rate trends, yields could fluctuate. "Bond investors remain cautious, and we expect yields to react," said Frank Walbaum of Naga in a report. The market analyst noted that weakening economic expectations or policy guidance for further rate cuts could lead to further declines in Treasury yields and the US dollar; however, a more cautious signal could provide temporary relief.

Stocks Hold Stable as the PPI Rises And Banks Are Under The Spotlight

Cory Russell

Apr 18, 2022 11:15

US futures

Europe

  • FTSE -0.2% at 7563

  • Dax -1% at 13978

  • Euro Stoxx -1% at 3800


Stocks are rising, while PPI inflation is rising faster than projected.


Following a marginally lower finish on Tuesday, US stocks are set for a calm morning as investors assess the latest US consumer inflation data and the start of earnings season.


Consumer prices were at a 40-year high Tuesday, according to inflation figures. The PPI inflation data, which measures wholesale inflation, showed a jump of 11.2 percent today, up from 10% in February and ahead of the prediction of 10.5 percent. PPI inflation is at an all-time low, implying that consumer prices are unlikely to fall any time soon.


Over the last week, expectations of a more hawkish Fed have bolstered the dollar while dragging down stocks. The market is putting in an 87 percent chance of a 0.5 percent hike at the May meeting, according to the CME Fed Funds. This was up from 81% the day before the CPI was released.


Separately, the headlines in Russia and Ukraine are focusing on the collapse of peace negotiations and the resurgence of oil prices.


In business news, US banks began their earnings season today, with JPMorgan getting off to a shaky start. As deal-making slowed in the aftermath of the Russian conflict and amid uncertainty about the future, the bank posted EPS of $2.63, down from $4.50 the year before and missing the $2.73 projection.

Where does the Dow Jones go from here?

The Dow Jones was rejected around 35380, dropping below the 200-day moving average, and is now challenging the 50-day moving average and the falling trendline support. The candle's extended upper wick, along with the MACD's bearish crossing, shows that there may be more downside to come. Sellers will attempt to break through 34100, yesterday's low, in order to decrease the price to 33500, the January 25 low, and 34200, the January low. On the other hand, if the support holds, buyers may try to reclaim the 200 sma at 35075.


Markets for foreign exchange The dollar is rising, while the yen is falling.


The US dollar index, which has surged to a 23-month high on hawkish Fed wagers, is pushing a few ticks higher for the 11th day in a row.


On central bank divergence, the USD/JPY is trading at a new 7-year high and aiming for a 20-year high. Overnight, Kudros of the Bank of Japan reaffirmed the central bank's accommodating position.


GBP/USD is up a few points after UK inflation statistics showed that in March, inflation rose to a new 30-year high of 7% YoY, up from 6.2 percent in February and ahead of predictions of 6.7 percent. Fears that a hawkish Bank of England may push the UK into recession have pushed the pound down to roughly 1.30.

 

  • GBP/USD +0.1% at 1.3011

  • EUR/USD +0.04% at 1.0850

Oil extends gain

Oil prices jumped 4% yesterday, crossing the $100 mark, and are climbing again today as chances for a diplomatic solution to the Russian conflict diminish. Meanwhile, weaker data out of China is limiting advances.


The most recent round of peace negotiations ended in a deadlock, with Russia accusing Ukraine of derailing the discussions and threatening to escalate its military operations. The statements come as the International Energy Agency (IEA) predicts that 1.5 million barrels of Russian oil would be missing from the market in April, increasing to 3 million barrels in May as a result of Western sanctions and logistical constraints.


OPEC has said that it would be hard to replace lost Russian oil and that it has no plans to increase supply.


Although statistics revealed that Chinese oil imports declined 14 percent owing to lockdown limitations, the lifting of lockdown restrictions in China supports demand.

 

  • WTI crude trades +1.7% at $101.98

  • Brent trades +1.7% at $106.14

  • Looking ahead

  • 15:00 BoC rate decision

  • 15:30 EIA crude oil inventories

  • 16:15 BoC press conference