The Asian session will have a light economic calendar, in which the Australian Westpac consumer confidence for May stands out, which is expected to fall from 9.4% to -1.7%. In Japan, the preliminary leading economic index for March will be published. Later in Europe, Germany will publish the final inflation reading for April. The key data for the day will be the US Consumer Price Index for April, which will be closely watched by investors.
Here’s what to know on Wednesday, May 10:
Wall Street fell in a quiet session as market participants awaited US consumer inflation data. The Dow fell 0.17%, while the Nasdaq lost 0.63%. The current deadlock in the debt ceiling is weighing on market sentiment. Meanwhile, the US dollar rose against its main rivals, with the US Dollar Index (DXY) rising 0.25% and posting gains for the second day in a row. However, the index remains close to the key support level of 101.00.
Data released Tuesday showed the NFIB Index of Optimism for American Small Businesses fell to 89 in April, the lowest reading since 2013. On Wednesday, The United States will publish the data from the Consumer Price Index (CPI) for April, which is expected to have a significant impact. The market consensus sees the CPI rising 0.4% in April, which would mean an acceleration from 0.1% in March. The annual rate is expected to remain at 5%. Core CPI is expected to match April’s 0.4% rise, with the annual rate falling from 5.6% in March to 5.5% in April.
If the US inflation numbers match expectations, they would signal a modest slowdown, which would likely maintain the Federal Reserve’s (Fed) tightening bias. In the afternoon, fiscal figures for April will be reported, and a significant surplus is anticipated for April. On Tuesday, US bond yields rose slightly, with the 2-year yield holding above 4.0% and the 10-year yield rising above 3.50%.
The par EUR/USD it retraced for the third time in the last four days and fell below the 20-day simple moving average (SMA) for the first time since mid-March. The pair found support at 1.0940. Despite hawkish comments from European Central Bank (ECB) officials, the euro lagged behind. In Germany the final CPI for April will be published and no surprises are expected.
On Tuesday, the GBP/USD pair managed to recover from its previous losses and closed unchanged around 1.2620. The British pound continues to show strength ahead of the Bank of England decision on Thursday. Meanwhile, EUR/GBP fell below 0.8700, hitting its lowest level since December.
USD/JPY has been modestly higher for the third day in a row, benefiting from rising US yields, finally closing above 135.00. In Japan, the publication of the Leading Economic Index (preliminary for March) is expected.
USD/CAD It continued to advance but was unable to recapture the 1.3400 level. Building permits for March will be released in Canada on Wednesday. AUD/USD It fell after a five-day run but managed to hold above 0.6750, while the critical 0.6800 resistance level remains nearby. The NZD/USD posted modest losses, correcting from its monthly highs. Overall, the commodity currency block maintains a positive bias.
He Gold continued its gradual rise, approaching $2,040, as market participants eagerly await US data. the silverfor its part, was relatively stable, hovering around the $25.50 level. The prices of Crude oil managed to recover from previous losses and registered slight increases, with WTI (West Texas Intermediate) experiencing a rise of 0.45%.
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Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
