USD starts the new week on the front foot with inflation data in focus

Summary:

USD rises as PCE Y/Y remains at 1.9%
German inflation also unchanged; EUR under pressure
Crypto lower as Venezuela announces end of Petro pre-sale
DE30 close to key 12650 level; US stocks little changed

The US dollar enjoyed a good week last time out and it is wasting no time in getting going this Monday with more gains seen for the buck. On the data front today the core PCE reading for March came in inline with both the expected and the prior print at 1.9% Y/Y. This inflation metric is often seen as the Fed’s preferred measure as the central bank often quote it when referring to price pressures. In remaining so close to the 2.0% mandate held by the bank it is likely supportive of further rate increases going forward – even if this week’s meeting is widely expected to see no change.

In terms of price pressure it appears to be a similar scenario in Europe with the latest inflation data from Germany has come in slightly higher than expected, allaying some fears that price pressures may be set to fall back into negative territory. The CPI Y/Y reading remained in line with the prior print, 1.6% vs 1.5% expected. The M/M figures also beat forecasts, with consensus expectations calling for a -0.1% print but the reading itself fell less than expected to 0.0% from 0.4% previously.

In the crypto space there can be more red seen on the screens with declines of less than 5% seen in all 5 markets. We have already written several times about the Venezuelan unconventional way to bypass sanctions imposed by the United States. The way has been the Petro, the Venezuelan own digital currency backed by crude oil, which has helped the South American country raise over $3 billion according to the latest statement announced by President Nicolas Maduro.

It’s been a fairly quiet start to the week for stocks with the DE30 a little higher on the European close. The German DE30 is still struggling within the vicinity of 12600 pts handle. The benchmark managed to open a notch above it on Monday yet the bulls seem not to have enough power to distance from the mentioned obstacle.