Markets extended recovery from weekly lows ahead of the US CPI data. Traders await the US Inflation data as they seek peak inflation amid an aggressive Fed hike cycle. Inflation remains a hot topic in the markets as Central banks race to calm the investors’ angst mood.
Fed member Meister indicated that investors should not expect inflation to move to 2% in the near term. China’s inflation exceeded forecast amid lockdown effects on commodity demand.
EURUSD rose by +0.33% in the early European session as hawkish ECB Lagarde brought an optimistic sentiment to the Euro. ECB President Lagarde indicated that the ECB rate hike may follow a few weeks after Bond Buying ends. The EUR inflation data was as expected, and the pair was trading inside an 11-day range between 1.0637 resistance and 1.0493 support. A break above the near-term resistance may see Euro having a corrective pattern towards the 1.0700 near-term high. The dollar remains weak ahead of the US Inflation data.
USDCAD retreated by -0.48% from an 18-months high ahead of the US CPI data. The Canadian dollar is boosted by the recovery in commodity prices underpinning US dollar strength in the near term. The pair has room to trade further upwards to 1.3400, a 20-months high since breaching the 1.2900 resistance. The US President Biden will be speaking on inflation again later in the New York session.
European stock rallied early in the European session as corporate earnings came out positively boosting risk appetite sentiment. The FTSE soared by +1.01% as bulls maintained a 7200 support. Upside gains are capped by 7400 psychological resistance.
DAX gained by +0.78% and bulls need to challenge the 13700 to trade higher. A failure to break that immediate high could see bears attempting to close a price action gap between 13510.00 and 13380.00. CAC40 extended gains by +1.16% to 6240.00 as bulls defended the 6024.7 critical support.
ROCHE HOLDINGS AG was the biggest loser plunging by -5.38% to a 22-months low at 352.5 as its cancer drug fails a late-stage trial.
US equities futures recovered losses as investors brace for the US key inflation report. The S&P 500 futures were up by +1.01% as bulls continue to hold above 4000 psychological support. Upside gains have a 4050.00 barrier and a break above that area may extend targets towards 4100.00.
Nasdaq futures rallied +1.23% as bulls challenged the 12500 near-term resistance. A break of that area may reinforce bullish interest to reclaim the 13000 area. Dow Jones rose by +0.90% and a critical area to watch out for is the 33000 psychological barrier.
The German 10-year yields rose by +0.42% for the 3rd day although upside gains remain capped by 9.20% and a failure to challenge that area may see prices seek to close the 16-year price action gap between 8.809% and 8.551%.
European gap prices jumped overnight on Wednesday as Ukraine threatened to stop Russian gas flows going into Europe via their border post. NaturalGas! Rallied +3% to 580.00 as conflict could disrupt supply.
Brent pared Tuesday’s losses, rising +4.19% as bulls found near-term support at 102.00. USWTI futures rallied +4.18% as Chinese Covid cases dropped by 51% bringing optimism on lockdown restrictions easing.