US stock market rally shows cracks, NZD suffers after inflation print

- Lacklustre inflation reading sends NZD significantly lower
- EURUSD technical overview
- Commodity wrap
- USDCAD sees volatile moves following inflation reading
- DOE report fails to send oil higher

Looking around the FX market one may notice that the US dollar is losing steam across the board on the back of improved risk sentiment and related capital flows to riskier assets. However, the NZ dollar is an exception here, it is declining approximately 0.4% against its US peer after first quarter price growth came in below expectations, increasing the odds for a rate decrease in the oncoming weeks.

In spite of the German manufacturing PMI slumping below 45 points for just the fifth time in the past 20 years, the DAX market has soared by 18% since December lows, following on from even more impressive gains in US indices. But is the market optimism justified and will the report for April show an improvement?

While tone of the reading is clearly upbeat for the oil prices, no major price move occurred. WTI prices (OIL.WTI) keeps struggling within the key resistance zone ($64.00-64.70). What makes this resilience even more strange is the fact that there are more factors that suggest an upward move, especially today’s Chinese data.

One of a few noteworthy readings that were scheduled for today was released at 1:30 pm GMT and it was the Canadian inflation report for March. Headline measure was expected to show an acceleration from 1.5% in February to 1.9% YoY in March. While expectations were quite high the actual reading still managed to meet them. However, even more interesting were the results with omission of the most volatile items.

The major currency pair has been climbing since the start of the new quarter after both the Federal Reserve and the European Central Bank had embraced a more dovish stance. While the ongoing upward move seems to be justified by demanding US dollar valuation as well as changes in the bond market, a pullback in the near-term could be in the offing looking at the H4 chart.

Daily summary: Inflation spooks US equities
Wendy’s stock jumped on upbeat earnings, yet pared all gains
US crude inventories fell just slightly - EIA data shows
Ichimoku patterns : NIKKEI (JAP225)
BREAKING: US CPI inflation soars 4.2% YoY in April
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