Spreadex Market Update
Busy Data Sheet Today Brings Volatility Risks for Traders
Following a quiet start to the week yesterday, traders are bracing for a busier data sheet today with US retail sales and Canadian CPI both due later today. The data run kicked off this morning with the latest UK labour market data. The unemployment rate was seen ticking higher to 3.9% from 3.8% prior while wage growth remained unchanged at 5.8%. Focus today will also be on the US debt ceiling negotiations between Biden and McCarthy which continue later. Yesterday, USD came under pressure as the Empire State Manufacturing index was seen plunging over 40 points last month highlighting weakness in the factory sector.
US PPI Drops, June Rate Hike Chances Fall Further
Equities markets saw mixed action yesterday. US stocks had a fairly muted session with the Nasdaq turning higher again but failing to break to new highs. The S&P too remained within the prior day’s range. Today’s US retail sales data should help create more decisive action, as too will incoming news flow around debt ceiling negotiations. The Nikkei was the standout winner yesterday with the index soaring a further 1.5% to hit new highs for the year.
Gold and silver prices are still struggling on the back of the heavy sales seen last week. Silver in particular has come under fresh selling pressure today, breaking down to new lows for the month. Should USD find any fresh upside on the back of today’s data, metals look vulnerable to further downside near-term.
Oil prices have come back under pressure today also following a stronger session yesterday. Crude futures were seen rallying over 3% on the day as price reversed sharply higher off initial lows. Overnight, weaker data out of China has blunted sentiment in the crude market with industrial production seen firmly undershooting expectations last month.
In FX, a softer tone to risk appetite on Tuesday is leading to stronger safe-haven demand, driving CHF and JPY higher, while risk currencies such as AUD and NZD are weaker. GBP has been softer today also on the back of weaker-than-forecast labour market data earlier. EUR traders have plenty to focus on today with eurozone flash GDP, trade balance data and ZEW economic sentiment data all due.
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