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Easing government bond yields weighed on the US dollar, which anyway ended the day with mixed performance across the major currencies. The yield on the US 10-year Treasury note stands at around 1.93%, down from its weekly peak at 1.97%.
The GBP/USD pair is unchanged on a daily basis trading at around 1.3525, while the EUR/USD pivots around 1.1430. Commodity-linked currencies were the best performers, as AUD/USD trades in the 0.7180 price zone, while USD/CAD fell to 1.2670.
BoC’s Governor Tiff Macklem spoke in the Canadian Chamber of Commerce and highlighted the role of supply-chain issues on higher inflation. He said he was confident issues may soon recede, although the current truckers’ conflict may add to disruptions.
Gold peaked at $1,835.81 a troy ounce, ending the day nearby. Crude oil prices ended the day little changed, with WTI trading at $89.40 a barrel.
The White House warned about soaring inflation, one day ahead of the release of the January Consumer Price Index.
Economic Data
Their have been no significant economic data all through the American session
Other Developments
Investors are preparing for Thursday’s Consumer Price Index report, which should give an update on the inflation picture. The Federal Reserve has already broadcasted a monetary policy pivot in order to address the historically high price increases.
The CPI report has had a big bullseye on it all week and the truth is that headline number will likely be one of the highest. Now the good news is we are likely close to a major peak in inflation and this number very well could be the peak.
Some improvements in supply chains have been lately felt across markets and this is the first clue that economies are nearing a peak in inflation as well. The inflation data is estimated to show that prices rose 0.4% in January, for a 7.2% gain from one year ago, according to Dow Jones.
Wall Street jumped on Wednesday, closing sharply higher as megacap growth stocks powered up thanks to a pause in rising interest rates, and upbeat earnings reports also encouraged investors to buy.
The benchmark 10-year US Treasury yield slipped from multi-year highs hit in the previous session, helping steady sentiment across global markets and boosting demand for growth stocks.
Meta Platforms surged, ending four sessions of deep declines that saw it lose almost a third of its value. The biggest boosts to the S&P 500 came from Nvidia and Microsoft.
Real estate was among the strongest of 11 S&P 500 sector indexes. The bond market basically is saying there’s a cap or a limit to how much the Fed is likely to raise rates, and that is very positive for stocks in general, and especially for growth stocks tend to be valued higher.
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