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US Stocks Jump on Softer PPI – Nasdaq up 1.7%
US stock markets paved their own path once again yesterday preferring to look to a weaker PPI print rather than Wednesday’s CPI uptick. The Dow did finish flat on the day, but the S&P and Nasdaq bounced back strongly, closing up 0.74% and 1.68% respectively. Other markets continued to react to the possibility of fewer Fed cuts this year, with US 2-year treasury yields topping 2% for the first time since November, closing slightly lower at 4.956%, the 10-year finishing at 4.574%. The dollar also moved slightly higher, with the Yen notably hitting a 34-year low against the greenback at 153.32, still with no sign of the much-touted intervention. Oil dropped lower, Brent losing 0.8% to $89.74 and WTI falling 1.4%, now trading around $85 per barrel. Gold, like US stocks couldn’t manage another day with lower prices and push back up 1.1% to hit another record, now trading above the $2,370 mark.
Gold Continues to Shine as it Hits More New Highs
Gold once again hit a fresh high against the dollar yesterday as a softer than expected PPI print encouraged buyers back to the market after a rare recent day off on Wednesday. Geopolitical concerns in the Middle East have helped the precious metal’s meteoric rise in the last few weeks as elsewhere the dollar has firmed but some traders now feel that the market will need another catalyst to push it another leg higher. Prices have climbed just shy of 20% from their low in 2024 and many have struggled to justify the move in what has been otherwise a dollar-positive period, but traders are trading what is in front of them and will continue to look to buy dips in the current environment. The 200-day moving average is around the $2,310 level now on the hourly chart and that will provide initial support on any dips with resistance only on projected levels until we see a top form from a technical perspective.
Quieter Trading Day into the Weekend
It should be a quieter end to the week than last week with just a couple of key data releases scheduled on Friday. There is nothing due out in the first trading session of the day, although traders in the Asian session will be focusing on a positive close on Wall Street initially. Investor focus will swing to the UK on the European open with the latest GDP number being released, expectations are for a 0.1% increase for the monthly data with anything lower likely to push Cable to fresh yearly lows. The US session sees key data from the University of Michigan released, with both the Preliminary Consumer Sentiment data and the Inflation expectations numbers set to be released before we ease into the weekend. Yen traders are likely to be on their toes for most of the day with it sitting near its weakest level for decades and the intervention threat could increase as liquidity decreases in the later session.
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