- European indices resumed downward move on Wednesday, with the regional CAC40 and the DAX 40 index falling 0.73% and 1.16%, respectively.
- German final CPI estimates showed inflation slowed for the first time in five months but remained elevated, while UK GDP figures showed that the economy unexpectedly expanded 0.5% in May, easing fears of a Q2 contraction.
- Mixed moods prevail on Wall Street following a hotter-than-expected CPI report. Nasdaq trades 0.25% higher, while the S&P 500 and Dow Jones dropped 0.1% and 0.35%, respectively
- US CPI jumped to 9.1% in June, the highest since November of 1981, and above analyst's estimates of 8.8%, core inflation fell slightly to 5.9% also topping market projections of 5.7%.
- Following last week’s solid NFP report, today's inflation report likely confirms that the Fed will stick to its aggressive tightening path in order to contain surging prices. Economists expect that interest rate will climb to 3.5% at the end of the year, however first rate cuts may take place even in the first months of 2023.
- Bank of Canada hiked its benchmark rate by a higher than expected 100bps and further hikes are expected. CAD strengthened considerably after the BoC decision.
- US dollar index pulled back slightly after hitting a fresh 20-year high of 107.58 earlier in the day, as investors took profits from recent gains
- Currently CAD and CHF are the best performing major currencies while JPY and USD lag the most.
- Oil trades near the flatline after the EIA reported US crude oil inventories unexpectedly rose by 3.254 million barrels last week, while analysts expected a 0.154 million drop.
- President Biden is visiting Saudi Arabia this week to push for increased production from OPEC nations.
- Gold rebounded slightly, however buyers struggle to break above $1740, while silver jumped above $19.20.
- Major cryptocurrencies rose slightly on Wednesday, despite risk-off sentiment. Bitcoin trades around $19.700, while Ethereum is testing $1085 level.
USDCAD pair hit key support at 1.2945 today. This zone is marked with the neckline of a potential double top pattern. Should a break lower occur, the downward movement may intensify. Next major support is located at 1.2865. On the other hand, if buyers regain control, another upward impulse towards the resistance zone at 1.3076 may be launched. Source: xStation5
