English (India)
11
Aug

U.S. Jobless Claims and PPI, Rivian and Illumina Earnings

calendar 11/08/2022 - 10:39 UTC

The dollar was trading significantly weaker against other majors and many emerging market currencies on Wednesday, following lighter than anticipated inflation figures as the CPI was even flat of a monthly basis. The move did not extend to all currency pairs as the USD/INR pair was trading well within the range seen over the past days after it opened on Thursday, while the USD/TRY quickly recovered from the intraday dip and again moved towards the 18.0-level where it has been over the past two weeks.

Cryptos followed the move in other markets with Bitcoin and Ethereum surging higher on the CPI release as the latter traded for the first time in more than two months above $1,900. Total estimated crypto market cap is estimated to have surpassed $1.2 trillion.

Major stock markets around the world and not just the U.S. reacted with a strong upside with markets like the Germany 40, Europe and Japan 225 (Yen) surging higher on the CPI figures. A rather restrained move higher at that time was seen in markets like the UK 100 and China A50.

For Thursday weekly U.S. jobless claims data and Federal reserve Bank statistics can be expected.

EUR/USD

The lower than anticipated U.S. CPI numbers caused significant volatility in the markets and allowed the EUR/USD rate to move above the 1.03-level for the first time in more than a month. While it was anticipated that the consumer price index growth would slow down compared to the 9.1% annualised rate of inflation seen last month, the drop towards 8.5% and the essentially flat growth on a monthly basis has clearly taken markets by surprise.

Meanwhile CPI data from Germany and Italy released on Thursday morning as anticipated confirmed the preliminary data published two weeks ago with a an annualised CPI rate of 7.5% in Germany and 7.9% in Italy.

EUR/USD

Gold

Gold spot prices reached for the first time in more than a month briefly the level of $1,800 just around the U.S. CPI data release, though at the end of the day settled lower. Platinum prices meanwhile reached a new six-weeks high and palladium was at the highest level since early May.

In theory the market move following the lower than anticipated inflation data could be bullish for gold as lower rates lower the opportunity costs of holding non-yielding assets like gold, while a weaker dollar makes it cheaper it relatively cheaper in other currencies. Consequently, as at the end of the day despite all this gold settled lower against the dollar, the move of the Gold (EUR) CFD was even more significant as it declined by a bit more than one per cent.

Gold

WTI Oil

Oil prices were also subject to substantial intraday volatility on Wednesday. While the CPI numbers helped push the price of a barrel of WTI crude oil briefly towards the $91-level a quick retracement followed just ahead of the release of the weekly data by the Energy Information Administration (EIA).

EIA data indicated that crude oil inventories increased even more than what the API stated a day earlier, with crude oil stockpiles up by 5.5 million barrels and distillate inventories increasing by 2.2 million barrels compared to last week. However, on the other hand, EIA data also showed a drop in gasoline stockpiles amounting to almost five million barrels. Following that at 2:30 PM GMT oil prices gradually increased over the following 3-1/2 hours.

On Thursday the OPEC Monthly Oil Market Report as well as the monthly oil statistic from the International Energy Agency will be released.

WTI Oil

US 500

Stock market indices rallied on the lower-than-anticipated inflation reading as there are hopes that a turnaround in inflation could help convince the monetary policy authorities to eventually turn around from their hawkish policy stance they were forced to assume due to rapidly rising price inflation.

Disney shares were up during the extended trading session by more than six per cent after the already positive market move during the regular trading session amounting to +3.94%. The company managed to exceed expectations both on revenue growth, which amounted to $21.5 billion as well as adjusted earnings per share (EPS) at $1.09. The company managed to increase its subscriber numbers for Disney+ by 31% compared to last year with 152.1 million subscribers reported in the past quarter. However, in its longer term guidance for 2024 the company only expects to see 135 million to 165 million “core” Disney+ subscribers.

Cruise operators’ stocks including Carnival (+9.32%), Royal Caribbean (+9.76%) and Norwegian Cruise Line (+12.18%) were the top performing S&P 500 components on Wednesday with the latter managing to recover all the losses sustained following the earnings release earlier this week.

On Thursday Rivian and Illumina are publishing their quarterly results.

US 500

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