Market Drivers – US Session – 13 April

Mohamed Abdelhamid 14 April, 2022 3:55 am Commodities, Forex Market, Global Stock Market, Market Update

Inflation, central banks and the Eastern European crisis are still impacting the market’s mood.

Economic Data
The US reported that the March Consumer Price Index jumped to 11.2% YoY, both above anticipated while the UK published the March Consumer Price Index, which jumped to a three-decade high of 7%

The annual rate of US Producer Price Inflation (PPI) rose to 11.2% in March, above expectations for a rise to 10.6% from 10.0% in February, data released by the Bureau of Labour Statistics and Department of Labour showed on Wednesday. The jump was powered by a 1.4% MoM rise in prices, according to the Producer Price Index, which was above the expected 1.1% rise.

Other Developments
The Bank of Canada increased benchmark interest rates by 50 bps to 1.00% and also announced plans to begin reducing the size of its balance sheet, starting April 25, given that it sees an increasing risk that expectations of elevated inflation could become entrenched.

Earlier in the day, the Reserve Bank of New Zealand decided to lift the official cash rate by 50 bps to 1.5% to combat inflationary headwinds pertaining to the Omricon disruptions and the Ukraine crisis.

On Thursday, it will be the European Central Bank’s turn to announce its monetary policy decision. German government rejected the EU ban on Russian oil for now, while Moscow declared that US and NATO vehicles delivering weapons on Ukrainian soil would be considered legitimate military targets.

Wall Street shrugged off negative headlines and closed with substantial gains. Government bond yields, on the other hand, suffered a sharp U-turn during the American session, edging sharply lower and weighing on the greenback.

Despite a big rise in US inventories, West Texas Intermediate oil extended recent gains as the expectations of global supply deficits climb. At the time of writing, WTI is down 0.73% after falling from a high of $104.27 to a low of $103.51/bbls.

IEA lowered its 2022 demand forecast on weak demand from China amid Covid-19 lockdowns. In its monthly Oil Market Report, the IEA said Russian production and exports continue to fall following its invasion of Ukraine. The agency said 0.7 million barrels per day of the Russian output had been shut in so far this month, and it expects that to rise to 1.5 million bpd by month’s end as buyers become scarce.

The EUR/USD pair trades at around 1.0880, while GBP/USD is just above the 1.3100 figure. The AUD/USD pair finished the day unchanged in the 0.7440 price zone, while USD/CAD ended the day in the red at 1.2565. The USD/JPY pair reached a fresh multi-year high of 126.31.

Gold maintains its bullish bias, trading near a fresh multi-week high of $1,981.57 a troy ounce. A generalized risk-averse mood alongside the dollar’s weakness during the American session maintained the metal bid throughout the day. Crude oil prices kept soaring, with WTI setting above $103.0 a barrel.

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