The US dollar was trading weaker overall, as can be seen from the USDX dynamics with a gradual decline observed after the volatility stabilized after the publication of the CPI statistics. It also allowed many emerging market pairs to fall, especially USD / TRY, as the lira continued to recover from a relatively recent all-time low.
While the cryptocurrency as a whole has declined, the results among cryptocurrencies other than market caps were still rather mixed: Bitcoin retained most of its gains from Wednesday compared to Ethereum, which again moved to the bottom of the $ 2,400 level.
Thus, the dominance of BTC also increased to over 42%, and the BTC / ETH rate reached its highest level in June. Some believe that the adoption of Bitcoin as legal tender in the Central American country of El Salvador will have a positive impact on cryptocurrency.
While the US 500 has reached a new all-time high and the US Tech 100 has also rallied, many other stocks around the world have generally moved quite sideways or even lower, such as the Italy 40 or Europe 50, which traded virtually unchanged. …
Relatively little significant data is slated for Friday beyond Michigan’s Consumer Sentiment Index.
EUR / USD
Although at the time of the publication of the monthly CPI data, increased volatility was also observed in the foreign exchange markets, at the end of the day the EUR / USD pair traded practically unchanged with a slight decrease. This meant that when the dollar weakened against many other major currencies, the euro also depreciated against several major currencies such as the pound sterling, Swiss franc and yen.
In its monetary policy decision, the European Central Bank (ECB) has confirmed that it will maintain the bond buying program (PEPP) until March 2022, but will also judge the change in conditions only after it sees the crisis over. The central bank did not appear to be too worried about rising inflation, as it sees it falling later when “the temporary factors disappear” and expects headline inflation “to remain below our target over the forecast horizon.”
Industrial production data from Europe was mixed with French statistics showing an unexpected 0.1% decline in April, while Italy’s statistics improved 1.8%.
On Friday, we can expect data on the Spanish consumer price index, as well as statistics on the Italian labor market for the first quarter. Data from other major EU economies are due next week, such as CPIs from Germany, France and Italy, as well as EU trade balance statistics due out on Tuesday.
Gold traded with considerable volatility during the announcement of the US Consumer Price Index (CPI) and after a short-term drop, rose sharply as inflation continued to rise faster than expected, with the annual CPI showing a 5.0% increase over the same a month a year ago, and even the core CPI rose 3.8%. This index aims to identify long-term inflation patterns as it excludes rather volatile basket positions, especially food and energy. Thus, the rise in inflation cannot be blamed solely on energy prices, which fell significantly during the first year of the pandemic-related restrictions.
Silver prices also rose. On the other hand, platinum and palladium prices did not rise on this rise as palladium prices declined moderately and platinum prices remained largely unchanged after another volatile trading day.
On Friday, the US CFTC will release its weekly Trader Commitment (COT) reports, which will show, among other things, also net speculative positions in US commodity futures such as gold and silver.
Oil prices edged higher on Thursday, recovering from Wednesday’s losses and briefly hitting a fresh post-pandemic high on the WTI crude oil contract during the day.
In its monthly oil report, OPEC reiterated its predictions that demand will continue to rise in the second half of this year as the recovery from the pandemic continues after the lockdown has eased in many regions. According to OPEC estimates, compared with the previous year, demand will grow by 5.95 million barrels per day.
Daily travel statistics to TSA checkpoints also support the thesis, as more and more travelers are reported. While the 1.67 million travelers reported on Wednesday were more than the same day in recent weeks, there is still a significant gap in activity compared to 2019.
The weekly US Baker Hughes Oil Rig Count will be released on Friday. It remained unchanged last week at 359 operating oil rigs.
Sentiment among various major US stock market indices was rather mixed on Thursday, with the US declining again in 2000, and the US 30 index also failed to maintain its intraday gains due to weak performance, especially Caterpillar (-3.72%). as well as some banks, such as Goldman Sachs (-2.70%) and JPMorgan Chase (-1.71%), weakened the dynamics of the index, despite the noticeable growth of Walgreens Boots (+ 3.64%) and Merch & Co (+ 3.00%).
Meanwhile, the US 500 and US Tech 100 indices rallied, with the former hitting new all-time highs during the trading session.
Cannabis stocks (Global Cannabis ETF -2.63%), meanwhile, were under pressure as stocks such as Aurora Cannabis (-3.46%) and Tilray (-6.81%) ended the day in the red.
Quite a few major companies are due to release their quarterly results next week, including Oracle on Tuesday and Adobe on Thursday.