CPI upside surprise, yields jump, NASDAQ lower, dollar higher
US CPI for April surprised on the upside, 4.2% YoY versus expected 3.6% and +0.8% MoM versus expected 0.2%. US Treasury yields jumped 2-3 bps and the interest rate sensitive NASDAQ fell more so than other indices. The dollar quickly moved higher. Commodity indices were reporting to have reached 10-year highs. Conflicts in Israel between Palestinian militants and Israeli forces weakened the shekel this week, but the currency did manage a small gain today.
“Doubt in not a pleasant condition, but certainty in absurd.”
May 12, 2021
EUR/USD 1.2095 GBP/USD 1.4118 USD/CAD 1.2071 AUD/USD 0.7776 USD/JPY 109.26 USD/CNH 6.4469 USD/ILS 3.2861 USD/MXN 20.0101 USD/CHF 0.9070 USD/INR 73.425 USD/BRL 5.2241 USD/SGD 1.3314 USD/DKK 6.1480 USD/SEK 8.3788 USD/NOK 8.2912
The dollar jumped higher following news that US inflation for April surprised on the upside – inflation rose the most since 2009. Weekly earnings data was a slight downside surprise. The closing of our biggest pipeline due to a cyberattack has led to fuel shortages and higher energy prices, but had little impact so far on the dollar or equities.GBP
The UK pound dropped against the dollar on upbeat US inflation data. Earlier, there was a slew of UK economic data releases for March, which were net positive – UK GDP MoM (+2.1%), Industrial Production MoM (+1.8%) and Construction Output (+5.8%) were all much better than expected.EUR
The euro dropped after this morning’s US CPI data which fueled a stronger US dollar. Traders had been bullish on the euro amid reversing negative sentiment from last week’s political issues in France, and instead were focusing on the country’s reopening of their cities next week and airports/tourists next month. Other positive news supporting the euro: ECB member Klaas Knot gave an upbeat assessment of the eurozone economy and the region’s vaccine rollouts are improving with Germany reporting 700,000 shots a day.CAD
The Canadian dollar continues to make gains against the US dollar as commodity price indices reached their highest levels in a decade. Energy products and lumber, key Canadian exports, having been leading the rise.ASIA/PACIFIC
The Chinese yuan moved little overnight even as the country’s economy shows improving growth.
The Australian dollar dropped nearly 0.5% following news that their government plans an outsized spending budget to spur economic growth.
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