Daily summary: Global stocks waver ahead of US inflation data

  • US 10y bond yield below 1.5%
  • US crude stocks fall for 3rd week
  • BoC leaves monetary policy unchanged

The US dollar was under pressure for most of the day. This was caused by a strong decline in bond yields, which in the case of the US 10-year bonds fell below 1.5%, which is the lowest levels since May and declines could  further deepen towards to February lows. However, tomorrow's inflation data may change a lot in this matter.

The expectations point to an increase in inflation in May to 4.7% YoY from 4.2% YoY. However, many analysts indicate that there is a chance for a reading above 5.0%, which may restore pressure on the Fed to take steps to stop further upward price dynamics. This is why the US dollar is regaining some vigor at the end of today's session. Despite low yields, gold is trading below $ 1,900 an ounce.

When it comes to commodities, it is worth paying attention to the price of oil, which fell today after the publication of the DOE data. Today's reading showed a significant drop in inventories, amounting to 5 million barrels per day. On the other hand, gasoline and distillate inventories increased sharply, partly due to higher processing capacity in refineries, but on the other hand, due to slightly lower demand.

In terms of oil, it is also worth paying attention to the currency that depends on this raw material. CAD was slightly losing today after the BoC decision did not bring any major changes. BoC left its key overnight rate unchanged at 0.25% as expected. The quantitative easing program was also kept at a target pace of $3 billion per week, following a C$1 billion reduction in the previous meeting. 

The Wall Street session is rather calm and the indices are fluctuating between small gains and losses. Technology stocks are currently the best performers. Meanwhile in Europe  German DAX slumped from its historic highs. Other indices from the Old Continent finished today’s session mostly higher

USDJPY pair bounced off the long term upward trendline and if the current sentiment prevails, another bullish impulse towards resistance at 111.00 may be launched. On the other hand, if sellers will manage to regain control and break below the aforementioned trendline, then support at 107.50 may be at risk. Source: xStation5

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