Here’s what you need to know on Friday, June 11th:
Markets remain optimistic and the dollar remains in a limited range despite high inflation. The focus is shifting to consumer confidence in the US, as well as potential progress in bilateral negotiations. The delay in reopening the UK is weighing on the pound, oil boosts its gains and cryptocurrencies are strengthening.
The S&P 500 hit another all-time high on Wednesday as investors ignored concerns about headline inflation spiking to 5%, its highest level since 2008. Markets seem convinced that the Federal Reserve will see prices rise and continue to label inflation as transitory.
US 10-year bond yield fell well below 1.50%, pulling the dollar down with it.
Analysis of US inflation: how high is it? Fed may still adhere to a “transition” position, the dollar may suffer
Hot inflation warms up space for June FOMC meeting
A bipartisan group of US senators has reached an agreement on $ 1.2 trillion in infrastructure spending, excluding tax increases. President Joe Biden is touring Europe and has yet to bless the deal. Details may appear on Friday.
EUR / USD traded at around 1.22, despite the European Central Bank’s decision to keep the pace of bond buying at a high level. ECB President Christine Lagarde said it was premature to talk about withdrawing from the quantitative easing program. As expected, the bank raised its growth forecast.
Pound / US dollar hovers below 1.42 amid continuing irritation over Brexit and reports that Prime Minister Boris Johnson will postpone the opening by four weeks. The final phase of recovery is slated for June 21, but the proliferation of the Delta variant has forced politicians to change their minds.
Monthly UK gross domestic product statistics for April are expected to show a solid growth rate of more than 2%, with Bank of England Governor Andrew Bailey speaking later in the day.
Oil WTI trades above $ 70 despite reports that Saudi Arabia has increased production. Gold hovers around $ 1,900 due to lower US yields.
Cryptocurrencies have consolidated their profits: Bitcoin hovers around $ 37,000 and Ethereum just below $ 2,500. Relative calm about digital assets could give way to a tumultuous weekend.
Preliminary Consumer Sentiment Index June figures are expected to recover after falling to 82.9 in May. The data is viewed as a leading indicator of retail sales.
US Consumer Sentiment Index, Michigan, May: Inflation Becomes a Problem