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Despite Wall Street’s losses on Tuesday, markets remained calm. When emphasis shifts to inflation statistics, banking concerns abate. Even though US rates increased, the US Dollar remained weak and dropped for the second straight day. Australia’s inflation data will be crucial on Wednesday before the next RBA meeting. The US will publish the core PCE on Friday, and Eurozone nations will disclose their CPI data on Thursday.
The S&P 500 fell by 0.2%, while the Nasdaq Composite fell by 0.5%, as Wall Street closed down. This time, IT rather than the banking industry was what caused US stocks to decline. Financial markets continued to calm down as the banking crisis lessened even further.
The DXY decreased by 0.40%, closing below 102.50 for the first time since early February. The US dollar wasn’t even benefited by rising yields. The 10-year US Treasury yield was 3.56% at settlement, and the 2-year was over 4.05%.
Economic Data
The key index of US Consumer Confidence (CB), which increased from 103.4 to 104.2 in February, showed improvement. The Core Personal Consumption Expenditure Price Index, which is the most important report, is coming on Friday.
Key Developments
The EUR/USD is about to hit 1.0850 after holding steady above 1.0800. The Euro is being supported by expectations that the European Central Bank (ECB) would keep rising interest rates. On Thursday, data on inflation in the nations of the Eurozone will be made public.
After failing to do so the previous week, GBP/USD is currently stabilising above 1.2300. On Wednesday, UK credit data will demonstrate how the tightening cycle is influencing lending.
AUD/USD is trading at its highest level since last Thursday and is currently probing levels over 0.6700. Australian retail sales increased 0.2% in February, falling short of the 0.4% market expectation. The Monthly Consumer Price Index is due on Wednesday (consensus: 7.1% YoY). The figures will be a crucial component of the Reserve Bank of Australia’s (RBA) meeting next week, which may decide to pause or continue raising rates. The NZD/USD exchange rate is 0.6250, which is equally significant for the Kiwi.
USD/CHF is still moving horizontally and can’t go beyond 0.9200. One of the worst performers on Tuesday was the Swiss Franc. EUR/CHF increased by 100 pip, moving closer to parity. On Wednesday, the Swiss National Bank (SNB) will publish its quarterly bulletin.
Gold gained to $1,975 after finding support above $1,950, and silver recorded its highest closing in nearly two months above $23.30.
WTI climbed by 0.85% to reach $73.30, which is a record high for the past two weeks. On March 28, 2023, WTI crude oil was attempting to cross over the $73.00 resistance area, which functioned as the bottom boundary of a previously broken trading range. Even if the price was trading about 15% above a daily low from March 20, 2023, the technical setup was not yet optimistic. Concerns over the supply and a risk-on attitude caused WTI crude oil to rise beyond $73.50. After a decision on an arbitrage between Kurdistan and Baghdad, supply risks stopped 450K barrels of shipments through Turkey. The benchmark prices of US crude oil are supported by Tuesday’s weaker US dollar.
Also Read:
Gold closes higher following two sessions of declines
Stocks close lower as Wall Street regains stability
T-yields do not ease the pressure on the US dollar.
WTI crude oil jumps beyond $73 on supply worries
USD/CHF returns from weekly lows and is getting close to 0.9200
