UK's Slowing Wage Growth Drop Crumbs to BoE's Doves

The British Pound is losing ground against the US Dollar for the second day in a row as pressure mounts on fresh UK employment data.

US: Core Inflationary Pressures Were (Again) Hotter Than Expected in February 

That makes two consecutive months of stronger than expected readings on core inflation. The upward surprise was the result of a modest gain in goods prices – snapping eight prior months of declines – and a still hot reading on non-housing service inflation. As a result, both the three-and-six month annualized readings on core ticked higher in February, rising to 4.2% (from 4.0%) and 3.9% (from 3.6%), respectively.

Sunset Market Commentary

Sticky. There’s no better way to describe today’s US CPI print. Headline and core inflation rose by 0.4% M/M in February. Both are in line with forecast, given that core CPI actually increased by 0.358% (vs 0.3% forecast). Annual readings increased for the top figure (3.2% Y/Y from 3.1% Y/Y) and fell slightly less hoped for the core gauge (3.8% Y/Y from 3.9% Y/Y).

US Inflation in No Hurry to Slow, But Markets Don't Care

US consumer inflation beat expectations for the fourth month in a row. The CPI rose 0.4% m/m. The monthly growth rate has been rising since October. The year-over-year rate climbed to 3.2%, a bit above forecasted 3.1%.

Why are Gold and Bitcoin Hitting New Records Together?

It’s pretty rare to see gold and bitcoin setting new record highs at the same time. Gold is considered the ultimate safe haven asset, while bitcoin is often viewed as one of the riskiest and most speculative plays. When both of them stage an incredible rally, it sends mixed signals about the mood in global markets.

UK GDP Data and Euro Area Industrial Production Figures on Today's Menu

In the euro area, we receive industrial production figures for January. It will be interesting to see how actual production fared in January as soft indicators have shown improvements and the global manufacturing cycle has bottomed out. Also, the ECB is set to unveil its new operational framework.

Risks for Next Week's FOMC Meeting Seem Tilted to the Hawkish Side

Risks for next week’s FOMC meeting seem tilted to the hawkish side. The dollar initially profited from the interest rate support with EUR/USD sliding from 1.0940 to 1.09. The pair eventually closed unchanged on the back of bullish risk sentiment. Another massive performance by the likes of Nvidia outweighed the inflation scare, pushing major US benchmarks to daily gains of up to 1.54% for Nasdaq.

Bitcoin Fluctuates But Keeps Its Direction

Bitcoin briefly broke above $73K in a sharp move, triggering an avalanche of stop orders that drove the price down 6.5% over the next three hours to $68.6K – precisely the level from which the last rally began on Monday.

GBP/USD Shrugs as UK Economy Shows Slight Growth

It wasn’t a spectacular rebound but the UK economy showed some slight improvement, with GDP rising 0.2% m/m in January. This modest gain was in line with market expectations and followed a 0.1% decline in December. The main drivers behind the gain were retail trade and construction.

Gold: Correction is Fuel for Growth

Gold lost over 1% on Tuesday, its first daily decline after nine days of gains, six of which were all-time highs. Signs of consolidation were already evident on Monday and Tuesday, which began with a moderate decline, accelerated by the release of US inflation data. While the rush out of risk assets on this news was very short-lived, the sell-off in gold was more sustained but did not go beyond a short-term fixation.