In the wake of UK CPI data, Sterling slightly higher, but lacks clear buying momentum. As BoE had anticipated, headline inflation demonstrated pronounced deceleration. Concurrently, the evident surge in services inflation dovetails seamlessly with the week's unprecedented data on wage growth. Given these dynamics, BoE is primed for another rate hike in the coming month, with indicators suggesting a consistent tightening trajectory. Nonetheless, pinpointing the exact juncture for the peak rate remains a matter of speculation. Globally, Dollar, although exhibiting a subdued tone today, is firmly positioned as one of the week's frontrunners, second only to the Pound. On the other end of the spectrum, Australian Dollar finds itself grappling with the week's underwhelming performance. This downturn is attributed to an amalgamation of bearish trends emerging from China and a continued dip in Copper prices. On the other hand, New Zealand Dollar is mixed, with help from today's post-RBNZ recovery. In the meantime, Canadian Dollar and Yen are charting the next in line for weaker performances, with Euro and Swiss Franc portraying a mixed picture for the time being. Technically, WTI crude oil is in notable pull back this week. With D MACD crossed below signal line, a short term top should be in place at 84.91, after hitting 161.8% projection of 63.67 to 74.74 from 66.94 at 84.85. Break of 78.72 support will likely bring deeper pull back through 55 D EMA (now at 77.09) to 74.74 resistance turned support. Such a pronounced dip in WTI might resonate with a broader risk-off sentiment, possibly in tandem with a significant dip in equities. Such a scenario could pave the way for an invigorated US Dollar. In Asia, Nikkei closed down -1.46%. Hong Kong HSI is down -1.38%. China Shanghai SSE is down -0.64%. Singapore Strait Times is down -0.66%. Japan 10-year JGB yield dropped -0.0094 to 0.622. Overnight, DOW dropped -1.02%. S&P 500 dropped -1.16%. NASDAQ dropped -1.14%. 10-year yield rose 0.037 to 4.221. |
