Spreadex Market Update
Traders Brace For Powell As Two Day Testimony Begins
Equities Broadly Higher, FTSE Still Struggling
Equities were broadly higher on Monday, extending gains as USD weakness continued. The greenback remains soft across the European open on Tuesday, keeping equities in the green for now though comments later from Powell offer plenty of two-way risk. Despite the broader bullishness in equities, the FTSE remains weaker today, still lagging on the back of Sunday’s lower-than-expected China GDP target. UK house price growth released today was seen unchanged for the 3rd straight month, though on a quarterly basis prices were seen down almost 3%, continuing the recent downward trend.
AUD Falls as RBA Signals Peak Inflation
AUD has been the weakest performer across the European open on Tuesday following the latest RBA meeting overnight. The bank hiked rates by 25bps as expected while noting that inflation had likely peaked, signalling that any further adjustments would be on a data dependent basis. Looking ahead, the bank forecast growth to be below trend in the next few years, turning focus towards RBA easing on a longer-timeframe.
Franc remains Firm
CHF remains the strongest currency today with the Franc extending gains on the back of yesterday’s hot inflation reading. With hawkish SNB expectations still in place, divergence between SNB policy and that of other central banks is keeping CHF well supported. Today traders will be watching comments from SNB chair Jordan with CHF poised for further upside on any perceived hawkishness.
Metals Slip, Crude Climbs
In the metals and commodities space, both gold and silver were a little weaker yesterday despite a softer USD. The upside in equities prices is taking centre stage currently, diverting demand away from metals. Today’s comments from Powell will be closely watched by metals traders with risk of volatility should we see any material moves in USD. Crude prices continued to push higher yesterday and are starting well at the open today. A weaker USD is helping lift crude sentiment here with crude futures now up around 10% from last week’s lows.
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