Daily Broad Market Recap – May 13, 2024

Markets were off to a bit of a slow start on Monday, before volatility increased and led to a mixed race for asset classes.

Crude oil has rebounded from the initial slump while gold and Treasury yields have fallen. What's up with that?!

Titles:

• BusinessNZ Services Index April: 47.1 (previously 47.2)
• New Zealand food price index for April: +0.6% m/m (previously -0.5%)
• Australian NAB Business Confidence Index for April: 1 (1 previous)
• New Zealand inflation forecast for Q2 2024: 2.33% q/q (previously 2.50%)
• Swiss Consumer Climate Index for April: -38 (-40 expected, -38 previously)
• Canada Building Permits for March: -11.7% MoM (-4.6% expected, +8.9% previously)
• FOMC Member Jefferson acknowledged progress in lowering inflation and labor market flexibility and supported maintaining restrictive policy until further evidence of easing price pressures emerges.
• Swiss Central Bank President Jordaens said that the battle against inflation is nearing an end
• Japan PPI for April: 0.9% y/y (0.9% expected, 0.9% previous)

Broad market price movement:

There wasn't much on the docket in terms of top-tier economic releases to work with, leaving asset classes to look for individual catalysts and allowing investors to position themselves ahead of key US data this week.

Gold and crude oil had a shaky start, but the latter managed to recover and closed almost 1% higher for the day. As it turns out, the ceasefire in the Middle East is facing challenges as Israeli forces reportedly continued to advance into the Palestinian territories, leading to renewed concerns about oil production.

Bitcoin also managed to recoup earlier losses before settling at around $63,500, while US stocks struggled to find direction ahead of the release of the US Producer Price Index and CPI.

Forex market behavior: US dollar against major currencies

Overlay of the US dollar against major currencies Chart by TradingView

The dollar pairs had a mixed start to the week, with EUR/USD and GBP/USD initially moving sideways while the majors fell from the start.

The Australian dollar appeared unaffected by the NAB Business Confidence Index, while the New Zealand Dollar is likely to fall due to declines in the BusinessNZ Services Index and quarterly inflation expectations.

However, price action was generally sideways until the European session began and sparked a more pronounced bearish bias for the US dollar. From there, the majors found their groove again, pushing USD/JPY and USD/CHF to break away from the pack and post gains of around 0.30% for the day.

On the other hand, the British pound made the strongest gains against the dollar, as traders may anticipate an upbeat British jobs report on Tuesday.

Potential catalysts coming on the economic calendar:

• UK employment data at 6:00 AM GMT
• Swiss Producer Price Index at 6:30 AM GMT
• ZEW economic sentiment index for Germany and the Eurozone at 9:00 AM GMT
• US PPI and core headlines at 12:30pm GMT
• Fed Chairman Powell's speech at 2:00 PM GMT

It is sure to be a busier trading day today, as the UK prepares to print the change in claims count for April and possibly trigger such moves from GBP/USD and GBP/NZD.

Later, the focus turns to US inflation data, with headline and core PPIs matching. Don't forget to stay tuned for Powell's testimony too!

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