UK Inflation Must Please Bank Of England, Crude Oil Down
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Looking at the market pricing, you could’ve hardly guessed, but yesterday’s US inflation report was not brilliant.
US stocks
But US stocks gave a mixed reaction. Why?! Why did people buy equities on strong inflation data yesterday, is the main topic of today’s Market Talk.
Still, treasury markets seemed more down to earth, as the US 2-year yield ticked to the highest levels since last November, activity on Fed funds futures gave a little more than 12% probability for a 50bp hike at the next FOMC meeting, versus around 9% at the start of the week.
USD index
But the dollar index remained stuck below its 50-DMA.
Gold
Gold extended losses to $1843 on the back of stronger yields and firmer US dollar.
EUR/USD
The EURUSD found support above the 50-DMA, which stands around the 1.0715 mark.
USD/JPY
The dollar-yen cleared resistance near its own 50-DMA level, but the risks are still tilted to the downside in USDJPY.
UK CPI and Crude Oil
In the UK, inflation in January still eased more than expected to 10.1%.
Crude oil remains offered into the 100-DMA, on a massive 10 mio barrel build in US oil inventories last week, while Biden Administration announced there would be further releases from the strategic petroleum reserves of 26 million barrels earlier this week.
Warren Buffett
In individual stocks, Warren Buffett sold 86% stake in TSM. Shares plunged more than 4% in Taipei.
Watch the full episode to find out more!
- 0:00 Intro
- 0:28 US inflation eased less than expected in January
- 2:55 But who cares?
- 5:35 FX & yields update
- 7:05 UK inflation must please BoE, but not sterling
- 7:36 Crude oil down on massive US inventory build
- 8:27 Buffett sells TSM. Ouch.
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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