Morning Wrap (15.05.2024)

• Wednesday's session will be marked by CPI data from the US. Publication at 1:30 pm BST. 

• The CPI data offers a chance for a dovish surprise. The baseline y/y reading is expected to indicate a decline in the rate of price growth to 3.6% against 3.8% in March. However, the distribution of votes in this case is characterized by a sizable standard deviation of the distribution of votes, so watch out for a possible upward or downward surprise. The overall outcome of the report will largely depend on price creation in the rental and automobile sectors. 

• Out of China there was a news report that the State Council is considering a proposal for local governments across the country to buy millions of unsold homes to further support the struggling real estate market.

• Companies in the APAC region traded mostly up, following momentum from the US, where the Nasdaq recorded a new record close.

• Futures based on European indices point to a better opening for today's cash session on the Old Continent.

• Antipodean currencies are performing best in the FX market. Slightly larger declines, however, are seen in the US dollar and the euro.

• Several Fed bankers will speak on monetary policy today. These will include Barr, Kashkari and Bowman, among others.

• FED Schmid and Mester communicated yesterday that interest rates should now be kept unchanged until bankers see sustained evidence of inflation returning to target. 

• The People's Bank of China left its key interest rate, the medium-term lending facility (MLF), unchanged at 2.5%, in line with market expectations. 

• In the commodity markets this morning, we can see elevated upward momentum in platinum and palladium. These metals are gaining 2.4% and 1.4%, respectively. 

• Bitcoin gains 0.5% and is once again trading in the $62,000 zone. . 

The current heatmap of volatility in the FX market. Source: xStation