US Stocks Drift Lower Again – Nasdaq down 0.4%
Major US stock indices drifted lower for the third consecutive session yesterday as investors took a bit of a breather after a hectic last week and key inflation data on Friday. The Dow closed fractionally under flat, losing just 0.08% on the day with the S&P dropping 0.28% and the Nasdaq dropping 0.42% from yesterday’s close. Currencies generally traded in familiar ranges and US treasury yields also failed to make much headway, the 2-year adding just 0.8 basis points to close at 4.595% and the 10-year losing 1.5 basis points to finish at 4.238%. Oil prices also eased, Brent losing 50 cents to $86.25 per barrel and WTI off 33 cents to $81.62 per barrel. Gold saw more volatility, spiking up sharply to within spitting distance of $2,200/oz before dropping later in the day to close near to flat at $2,177/oz.
Oil Prices Fluctuating Between Geopolitical and Fed Rate Risks
Oil Prices have been moving sharply in recent sessions as traders react to differing factors affecting the future movements of Black Gold. The Russian government ordered local suppliers to cut output in the second quarter to 9 million barrels per day which lifted prices on Monday. But they drifted lower yesterday as the market settled and traders looked ahead to key US inflation data and its possible effect on the Fed’s rate cut plans. News of a ceasefire in Gaza is also keeping traders on their toes as Houthi action in the Red Sea continues, however, most agree that Friday’s PCE number could have more long-term impact.
Inflation Data in Focus Today
The immediate focus in the Asian session will be on Australia today with the release of the latest CPI data due out early in the piece. The expectation is for a slight rise in the year-on-year number to 3.5%, but the recent pattern has been for lower-than-expected prints, so traders are preparing for a challenge again of the 65-cent level if lightning strikes for the fifth time in a row. The European session sees the release of the key Spanish CPI numbers as well as the MPC Meeting minutes later in the day, which could see further volatility in the pound. It’s set to be relatively quiet in the US Day with less scheduled on the calendar than yesterday. However, Oil traders will take note of the latest US inventory numbers and investors will be keen to hear what the FOMC’s Waller has to say later in the session.
