Summary:
- US CPI beats forecasts to remain inline; Retail sales turn negaitve
- Gold slumps before surging to weekly high; stocks recover initial weakness
- Oil looks to rise as DOE inventory increases less than forecast
- SEK wobbles after Riksbank decision
- Cryptocurrencies all moving higher with Litecoin leading the way
It’s been a pretty busy afternoon in the markets with some large moves seen across several asset classes. The catalyst for the volatility was the US data released at 1:30 which showed a higher than expected reading for the CPI and an unexpected drop into negative territory for retail sales.
The market reaction at first appeared to focus on the strong CPI number with stock indices and Gold dropping sharply and the USD marching higher. These moves have since reversed however with Gold rallying some $30 off the lows to print a weekly high whilst the USD has fallen back across the board. Indices such as the US500 and DE30 have recovered after their earlier weakness although the reversal here isn’t as pronounce as in the aforementioned markets just yet.
A smaller than expected rise in the weekly DOE inventories has seen the price of Oil move higher this afternoon as Brent crude attempts to recover after the market fell to its lowest level in 2 months yesterday. The headline figure showed a rise of 1.8M in the latest DOE release which was notably lower than the 2.8M expected and also marginally below the prior drop of 1.9M.
The Swedish central bank left interest rates unchanged at today’s meeting matching market expectations. At the same time it decided to slash inflation projections quite noticeably but the first rate increase is still forecast to be in the second half of the year. Consequently, the SEK is wobbling at the time of writing being flat on the day against the US dollar but given the long-term backdrop it seems to be well positioned for further gains
It’s been a good day for cryptocurrency bulls with all 5 markets currently sitting on impressive gains. Litecoin is the standout performer with recent talk of a fork possibly seeing a rush to buy. Anyhow the market has enjoyed a stunning increase today and has rallied by around 30% by the European close. today could be a big day for Bitcoin and other cryptocurrencies as well as two subcommittees in the US House of Representative have begun to discuss potential applications for the blockchain technology in the government. The meeting titled “Beyond Bitcoin: Emerging Applications for Blockchain Technology” began at 10 am EST (3 pm BST) but as yet hasn’t seen any headlines.