Market focus is back on data

Yesterday risk appetite returned to the market. Stocks around the world rebounded. The Nasdaq Composite was the best-performing US index, ending the day up 1.8%. In Europe, the Dax index gained 1.23%. The foreign exchange market shows a slight volatility of the main currency pair, which fluctuates around the level of 1.0850.

US debt yield

AUD/JPY, often a reflection of global market sentiment, rose for the third day in a row, touching the 88.8 level. In turn, the US debt yield remained at the same level. 2 year olds indicate 4.11. The market is still alive due to problems in the US and European banking sector.

However, they are disappearing every day. However, the lack of new information about the problems of another institution means that the market is increasingly moving away from this topic and is slowly preparing for the interpretation of data from the US and Europe. We will only know the main ones tomorrow.

Again, the electrifying reading should be the US spending report, and in particular the core PCE index, which is the Fed’s preferred measure of inflation. Forecasts show that the base rate will remain at 4.7 percent. y/y (similar to the previous month).

At the same time, the monthly change is expected to decrease to 0.4%. from 0.6 percent earlier. The release of short-term and long-term inflation expectations according to the University of Michigan report will also be important for the market. This is also waiting for us on Friday. In turn, the dynamics of price growth in Europe will be shown by today’s and tomorrow’s HICP and CPI values ​​for Germany, Spain, France and the entire eurozone.

Currency market

When the dust from the financial sector turmoil settles a bit, the old dependencies on currencies, bonds and stocks are back. Higher-than-expected readings for March should provide support for the region’s currencies, as the market will again interpret them as a factor encouraging government institutions to continue restrictive monetary policy.

When it comes to the market valuation of futures contracts, you may see less than 50 percent. the likelihood of a 25 basis point hike in the US interest rate in May. The market is still looking for a decline in the value of money of about 60 basis points before the end of the year. Yesterday’s rally in the stock market came despite reports that the FDIC may offer a program to raise funds from banks to fund a $128 billion deposit insurance fund.

In this way, smaller regional creditors will be protected and the burden will shift to larger banks. CFD based on Nasdaq100 testing local resistance around 13k. Fri. Its break may trigger a slightly larger upward movement. Then the path to 13,700 points will open, which corresponds to the highs of mid-August 2022.

Increased volatility in the market may also occur due to speeches scheduled for today by Susan Collins and Thomas Barkin from the Fed. Janet Yellen will also express her opinion, who has recently caused a lot of panic in the market and caused a fall on Wall Street just after the last decision of the Fed to raise.