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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money 

Daily summary: Hawkish FOMC not enough to offset dovish CPI

10:11 pm 12 June 2024

  • FOMC left interest rates unchanged in the 5.25-5.50% range, in-line with market expectations. Statement repeated that central bank needs to have greater confidence in inflation return to target before cutting rates
  • New 'dot-plot' showed median expectation of just a single rate cut for this year, down from three cuts in March projections. However, there was an almost equal split between members who saw 1 and 2 cuts in 2024
  • However, Fed Chair Powell tried to send a very balanced message during the press conference, stressing that projections are not a plan
  • Money markets see an around-70% chance of Fed cutting rates, little changed compared to pre-FOMC pricing
  • Wall Street indices dropped slightly after FOMC decision but held onto post-CPI gains and remain near all-time highs. S&P 500 trades 1% higher, Nasdaq rallied 1.8%, while small-cap Russell 2000 surges 2.2%. Dow Jones trades flat
  • Apple continue upward move launched after developers event and surges 6%, extending two-day rally to over 13%
  • USD recovered part of post-CPI declines after FOMC decision. However, EURUSD still trades 0.7% higher on the day
  • Gold and silver dropped after FOMC decision but also hold above pre-CPI levels. Gold gains 0.2%, while silver trades over 1% higher
  • US CPI inflation decelerated from 3.4% in April to 3.3% YoY in May (exp. 3.4% YoY), while core CPI inflation decelerated from 3.6% to 3.4% YoY (exp. 3.5% YoY). Release trigger a strong dovish market reaction, with USD dropping and indices gaining
  • European stock market indices traded higher today, support by dovish US data release - German DAX gained 1.5%, French CAC40 moved 1% higher, Dutch AEXx jumped 1.1% and UK FTSE added 0.8%
  • Oil erased daily gains and turned negative after bearish DOE report. Report showed a 3.73 million barrel increase in oil inventories (exp. -1.7 mb), a 2.57 million barrel increase in gasoline inventories (exp. 0.2 mb) and a 0.88 mb increase in distillate stockpiles (exp. 0.5 mb)
  • UK GDP growth decelerated from 0.7% YoY in March to 0.7% YoY in April (exp. 0.6% YoY). On a monthly basis, UK economy stagnated (0.0% MoM vs 0.0% MoM expected)
  • UK industrial production declined 0.4% YoY in April (exp. +0.3 YoY), while manufacturing production was 0.4% YoY higher (exp. 1.6% YoY)
  • Final German CPI reading for May came in-line with flash release and showed headline CPI accelerating from 2.4% in April to 2.8% YoY in May
  • Chinese CPI inflation remained unchanged at 0.3% YoY in May (exp. 0.4% YoY), while PPI inflation accelerated from -2.5% to -1.4% YoY (exp. -1.5% YoY)

The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.

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