Markets continued to settle down on Tuesday, despite the red in Wall Street. Banking concerns ease as attention turns to inflation data. The US Dollar remained weak and fell for the second day in a row, even as US yields rebounded. Inflation numbers from Australia will be critical on Wednesday ahead of the next RBA meeting. On Thursday, Eurozone countries will release CPI numbers and the US will publish the core PCE on Friday.
Here is what you need to know on Wednesday, March 29:
Wall Street ended lower, with the S&P 500 falling by 0.2% and the Nasdaq Composite losing 0.5%. This time it wasn’t the bank sector but tech what drove US equities lower. The banking crisis eased further and financial markets continued to settle down.
The DXY dropped 0.40%, posting the lowest close since early February below 102.50. Not even higher US yields helped the Greenback. The US 10-year Treasury yield settled at 3.56% and the 2-year above 4.05%.
US Consumer Confidence (CB) improved in February, with the main index rising from 103.4 to 104.2. The key report is due on Friday with the Core Personal Consumption Expenditure Price Index.
EUR/USD held firm above 1.0800 and is about to test 1.0850. Expectations that the European Central Bank (ECB) will continue raising rates are offering support to the Euro. Inflation data from Eurozone countries will be released on Thursday.
GBP/USD is consolidating above 1.2300 after failing to do so last week. UK credit data on Wednesday will show how the tightening cycle is affecting lending.
AUD/USD is testing levels above 0.6700, trading at the highest level since last Thursday. Australian Retail Sales rose 0.2% in February, below the 0.4% of market consensus. On Wednesday, the Monthly Consumer Price Index is due (consensus: 7.1% YoY). The numbers will be a key input for next week’s Reserve Bank of Australia (RBA) meeting, which could raise rates further or pause. The numbers are also relevant for the Kiwi. NZD/USD it at 0.6250.
USD/CHF remains sideways unable to rise above 0.9200. The Swiss Franc was among the worst performers on Tuesday. EUR/CHF rose a hundred pips, approaching parity. The Swiss National Bank (SNB) will release its Quarterly Bulletin on Wednesday.
Gold found support above $1,950 and rose to $1,975, while Silver posted the highest close in almost two months above $23.30. WTI gained 0.85%, advancing to the highest level in two weeks above $73.30.
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