The United States Bureau of Labor Statistics will publish the US Consumer Price Index (CPI) m/m on January 12 at 15:30 GMT+2. The index measures a change in the price of goods and services purchased by consumers.
News digest on May 14
The market continues to be in a risk-off mode. Time to gain on falling!
AUD dropped on poor unemployment data
Almost 600,000 jobs were lost in April in Australia. Numbers were worse than analysts anticipated. As a result, AUD sank after its strong rally. Let’s look at the daily AUD/USD chart. The price has hit the 100-day moving average already twice. There is a still strong upward trend. However, no way AUD can break out this level soon in such a risk-averse market. If it manages to do it though, it will open doors towards 0.6635. Support are at 0.6375 and 0.626.
Trump disagrees with Powell on negative rates
The US president wants rates to go below zero, but Jerome Powell, the Fed chairman, doesn’t even consider this tool. Yesterday Powell claimed that outlook is dire and there are downside risks ahead. He thinks extra government spending will prevent the country from the long-term recession. The Fed also began buying exchange-traded funds to supply more money to the market and discussed additional aids. USD surged as well as JPY.
Stocks are overvalued
Stanley Druckenmiller, a billionaire investor, said that he didn’t remember the time when the risk of holding stocks so outweighed the potential profit. According to him, the market is flooded with liquidity and soon it will contract. Donald Trump, as always, impressed everybody with his straightforwardness.
However, Wall Street analysts don’t think the same. The S&P 500 has dipped this week, and economists expect the further downturn. Most analysts believe the market will be bearish this year.
Oil trades higher
The WTI oil price increased to $25 a barrel. Overall, it’s going up in May. It was caused by the drop in U.S. crude inventories, marking the first decline since January. However, analysts warn that oil prices could go negative again ahead of June contacts expiration.
The US dollar index keeps rounding above the 103.60 historical support level. The buyers have already defended this level for three weeks, highlighting their interest in the greenback. Thus, buying USD looks less risky right now.
On the H4 timeframe, the US dollar index has formed a bullish falling wedge. At the beginning of the trading session, the price is testing the upper border of this wedge. Thus, in case of a higher-than-expected Core PCE Price Index m/m, the US dollar will skyrocket against other currencies.
The Reserve Bank of Australia (RBA) will make a statement and release a Cash Rate on February 7, 05:30 GMT+2. It's among the primary tools the RBA uses to communicate with investors about monetary policy.
This week may be the most important since the year started as the Fed assess the economic outlook and the US presents fresh NFP readings.
S&P Global, a private banking company, will release a monthly change in British Flash Manufacturing Purchasing Managers Index (PMI) on January 24, 11:30 GMT+2. The index is a leading indicator of economic health as businesses react quickly to market conditions, and purchasing managers hold the most current and relevant insight into the company's view of the economy.