Important Information

You are visiting the international Vantage Markets website, distinct from the website operated by Vantage Global Prime LLP
( www.vantagemarkets.co.uk ) which is regulated by the Financial Conduct Authority ("FCA").

This website is managed by Vantage Markets' international entities, and it's important to emphasise that they are not subject to regulation by the FCA in the UK. Therefore, you must understand that you will not have the FCA’s protection when investing through this website – for example:

  • You will not be guaranteed Negative Balance Protection
  • You will not be protected by FCA’s leverage restrictions
  • You will not have the right to settle disputes via the Financial Ombudsman Service (FOS)
  • You will not be protected by Financial Services Compensation Scheme (FSCS)
  • Any monies deposited will not be afforded the protection required under the FCA Client Assets Sourcebook. The level of protection for your funds will be determined by the regulations of the relevant local regulator.

If you would like to proceed and visit this website, you acknowledge and confirm the following:

  • 1.The website is owned by Vantage Markets' international entities and not by Vantage Global Prime LLP, which is regulated by the FCA.
  • 2.Vantage Global Limited, or any of the Vantage Markets international entities, are neither based in the UK nor licensed by the FCA.
  • 3.You are accessing the website at your own initiative and have not been solicited by Vantage Global Limited in any way.
  • 4.Investing through this website does not grant you the protections provided by the FCA.
  • 5.Should you choose to invest through this website or with any of the international Vantage Markets entities, you will be subject to the rules and regulations of the relevant international regulatory authorities, not the FCA.

Vantage wants to make it clear that we are duly licensed and authorised to offer the services and financial derivative products listed on our website. Individuals accessing this website and registering a trading account do so entirely of their own volition and without prior solicitation.

By confirming your decision to proceed with entering the website, you hereby affirm that this decision was solely initiated by you, and no solicitation has been made by any Vantage entity.

I confirm my intention to proceed and enter this website Please direct me to the website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom

By providing your email and proceeding to create an account on this website, you acknowledge that you will be opening an account with Vantage Global Limited, regulated by the Vanuatu Financial Services Commission (VFSC), and not the UK Financial Conduct Authority (FCA).

    Please tick all to proceed

  • Please tick the checkbox to proceed
  • Please tick the checkbox to proceed
Proceed Please direct me to website operated by Vantage Global Prime LLP, regulated by the FCA in the United Kingdom.

×

Are you long or short on indices?

Trade Indices Now >
Long Or Short On Indices?

en

View More
SEARCH
  • All
    Trading
    Platforms
    Academy
    Analysis
    Promotions
    About
  • Search
Keywords
  • Forex Trading
  • Vantage Rewards
  • Trading Fees
  • facebook
  • instagram
  • twitter
  • linkedin
  • youtube
  • telegram

Markets jump on soft CPI but Fed needs more time for cuts

Vantage Updated Updated Thu, 2024 June 13 02:19

Headlines

* Fed holds rates steady, indicates only one cut coming this year

* Nasdaq, S&P 500 hit new all-time highs after softer US CPI

* UK economy crawls into Q2 but promises better times ahead

* Gold pops higher before giving back some gains on modestly hawkish FOMC

FX: USD initially tumbled after cool CPI. It hit a major Fib level at 104.26 before paring losses on the Fed median dot plot for 2024 showing jus tone rate cut from the predicted two and three in the prior plot in March. The Fed’s statement was left broadly unchanged while Powell’s press conference added little new. The Fed are data dependent and not yet confident to cut rates. But yields were lower with 45bps now priced in for 2024, more than 37bps at the start of the day.

EUR rose to a high on the day of 1.0852 after the softer US CPI data. But sellers stepped in during the FOMC statement and Powell’s press conference. Focus in Europe remains on France and wider French versus German government bond yield spreads. We are very close to the top of the range in this differential. Wider spreads will weigh on EUR.

GBP popped up to levels last seen in mid-March at 1.2860. Cable then closed back in the recent range just below 1.28. UK monthly GDP was flat against estimates of a 0.1% fall. Weather may have been a factor with retail soft, but the services sector rose.

USD/JPY pulled back much of the losses seen after the US inflation data. Prices had dipped below 156 but settled at 156.77. The 10-year US Treasury yield slipped to lows seen in April before rebounding back to its 200-day SMA at 4.32%.

AUD advanced just above 0.67 before following all the other majors and giving way to some dollar buying. Eyes are on the jobs data. CAD got to 1.3679 before bouncing back above 1.3720. Firmer risk appetite helped initially but the major’s big driver should remain rate differentials.

US Stocks: Wall Street’s main indices posted more record highs.  The S&P 500 finished up 0.85% at 5,421. The Nasdaq 100 settled higher by 1.33% at 19,465. The Dow closed flat at 38,712. Tech was easily the biggest gainer (+2.46%) with consumer staples (-1%) and utilities the main laggards. Apple spiked higher to $220.20 briefly dethroning Microsoft as the world’s most valuable, before settling 2.9% higher. Oracle jumped over 13% after it forecast double-digit revenue in fiscal 2025.

Asian Stocks: APAC futures are positive. Asian stocks were muted after the mixed handover from Wall Street. Miners and defensive sectors led the falls on the ASX 200. The Nikkei 225 moved beneath 39k as markets digested better than expected PPI data. China stocks were varied with caution over the mixed China inflation data with cooler CPI and narrower factory gate deflation.

Gold made a sharp move higher after the CPI data. But the modestly more cautious Fed and Powell saw gains given up. Prices got near the Fib level at $2343 before falling.

Day Ahead – Australia Jobs

Consensus sees May adding 25,000 jobs, after the better-than-expected print of 38,500 in April. The unemployment rate is predicted to print at 4%, down one-tenth from the prior 4.1%. Economists say shifting seasonal patterns were in play last time which means more people than usual are not employed during school holidays. But they have jobs lined up for the next month.

Chart of the day  – AUD still choppy

AUD/USD has been more or less bouncing off near-term support around 0.66. But prices haven’t been able to move decisively above 0.67. The RBA is still certainly in play as sticky inflation means the bank will struggle to justify policy easing in 2024. Indeed, the chance of a hike from rate setters is still on the table.

CPI rose 0.7% m/m in April and a tenth higher to 3.6% y/y. There are some now even questioning if the RBA hiked rates enough at 4.35%? That is 100bps lower than the Fed, though US CPI did hit peaks above 9%. Higher inflation most probably means higher rates for longer so should underpin AUD.