Sunset Market Commentary

Trading was again confined to rather tight ranges today. US yields created some breathing space end last week compared to important support levels (4.7% area US 2-y yield, 4.3/37% area 10-y yield), but for now follow-through gains look rather difficult

Ethereum Knocking at Support's Door

However, the pattern is even more negative in Ethereum, where the price has pulled back to the lower end of the range of the last three months, near $2900, drawing a bearish triangle. Technically, breaking this support opens the way to $1600-1500. This sounds like an overly negative scenario, and in our opinion, it is worth being prepared that Ethereum could attract enough buyers already on a dip into the $2500-2700 area.

Pound Edges Lower as UK Labor Market Cools

The British pound has posted slight losses on Tuesday. GBP/USD is down 0.08%, trading at 1.2548 in the European session at the time of writing.

EUR/USD Steady as German Confidence Index Rises

Germany’s inflation rate remained unchanged in April at 2.2% y/y, matching the market consensus. Services inflation slowed but this was offset by higher food prices. Monthly, inflation rose by 0.5%, up from 0.4% in March and matched the market consensus of 0.4%. This marked the highest monthly gain in 14 months.

US: Small Business Optimism Index Improves in April

After declining for the past three months, small business confidence improved in April. Most small businesses are planning to increase capital investments and headcounts over the coming months, with sales expectations improving gradually. However, high-level expectations for the economy were little changed on the month, with most small businesses continuing to expect the economy to weaken and credit conditions to remain tight moving forward.

Sunset Market Commentary

Both interest rate markets and the dollar held a wait-and-see mode this morning with EMU bonds slightly underperforming the US Treasuries. German ZEW investors sentiment again improved more than expected (expectations index from 42.9 to 47.1, the 10th consecutive improvement). This is not the most important input for the ECB, but it maybe marginally supported EMU yields.

Can Gold Climb to a New Record High?

After hitting a record high at around $2,430 on April 12, gold entered a corrective phase due to the easing of geopolitical tensions at the time allowing investors to continue offloading safe-haven positions.

Preview of RBNZ: Persistent Inflation to Keep the Champagne Stoppered

We don't expect any significant change to the RBNZ's "Watch, Worry and Wait" strategy it has been following since the May 2023 Monetary Policy Statement.

Will Today's CPI Echo the PPI Print?

In the US, the focus will be on April CPI. We forecast headline inflation at +0.4% m/m SA, as energy inflation has been boosted by rising oil prices. Core inflation is likely to tick slightly lower to 0.3% m/m SA, driven especially by further disinflation in housing services. Recently, leading data has painted a mixed picture, with PPI and ISM pointing towards accelerating inflation, while PMIs and NFIB neglect this notion.

New Sticky Inflation Evidence Wasn't Start of Profound UST Sell-off or USD Rally

Markets Significantly accelerating monthly US producer price inflation (April) triggered the obvious initial sell-off in US Treasuries and spike in the dollar. Producer prices rose by 0.5% M/M on the headline and on the core level. Services costs rose by 0.6%, the most since July, while goods prices increased by 0.4% mainly because of fuel […]