Spreadex Market Update
GBP Tanks On Latest BOE Rate Hike as Growth Fears Weigh on Sentiment
US PPI Drops, June Rate Hike Chances Fall Further
The release of US PPI yesterday was seen as adding further weight to the view that the Fed will hold rates unchanged at the June meeting. PPI was seen rising just 0.2% last month, below forecasts for a 0.4%. Annually PPI fell to 2.3% from 2.7% prior, its lowest level since Q1 2021. US recession fears have returned to focus this week along with uncertainty ahead of the looming US debt ceiling deadline. With talks pushed back into next week and a resolution yet to be secured, markets are fearful of an historic US government default which would have a considerable effect on the economy.
Gold prices continue to fall back from recent highs on Friday. XAUUSD is trading back below the $2020 level as the correction from highs around $2066 deepens. The fall in silver prices has been even sharper with XAGUSD now down almost 9% from recent highs following a 5% drop yesterday, silver’s largest single-day loss since February.
Cryptos have been on the turn also. Bitcoin prices are now trading around 15% down from the YTD highs. BTC has broken below the recent $26985 support level today as negative sentiment continues to weigh on prices. News of Bittrex filing for bankruptcy earlier in the week along with processing issues at Binance have spooked traders with cryptos coming off across the board ahead of the weekend.
In FX, The Swiss Franc has roared back to life today as traders pile into the currency on the back of hawkish comments from SNB chairman Jordan this week. Jordan warned that further tightening was likely necessary given that inflation remains too high. The SNB head went on to say that rates are not yet restrictive enough to bring inflation down. CHF gains have been most pronounced today against NZD which has been weaker on the back of a softer set of inflation expectations readings overnight.
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