GOLD
Gold prices experienced a decline of more than 1% following the release of US inflation numbers for February, which surpassed the consensus forecast. This unexpected surge in inflation immediately impacted financial markets, leading to gains in the US dollar and higher treasury yields, consequently affecting the price of bullion. This recent inflationary surprise reminds traders that the battle against escalating consumer prices is ongoing, shifting focus back to economic data and readjusting expectations regarding the timing of Federal Reserve rate adjustments. In this context, forthcoming data releases assume heightened significance, as the resilience of the US economy continues to defy expectations and could potentially allow the Fed to postpone its first interest rate cut beyond June—a scenario that, if confirmed, may pose additional downside risk for gold prices.
Ricardo Evangelista – Senior Analyst, ActivTrades
Source: ActivTrader
EUROPEAN SHARES
Stocks traded without clear direction in Europe on Wednesday. The recent rally took a break as market sentiment got torn in different directions.
Asian shares closing mostly in the red overnight didn’t significantly impact most EU benchmarks, which have held yesterday’s gains despite the latest disappointing US CPI print.
Although US inflation came out higher than estimated yesterday, investors in EU equities were pleased to receive another batch of dovish hints, this time from ECB official Martin Kazaks, who said the monetary easing cycle could be looming in the next few months.
Investors continuing to bet on rate cuts in the US and the EU are still seen as the biggest market driver for stocks so far. Higher market tops will remain the most likely scenario as long as dovish hints continue to pile up in those two regions.
With that in mind, investors will focus on today’s speech from another ECB Member, Yannis Stournaras, while EU industrial production data are expected in the morning.
In the afternoon, traders will likely shift their attention to the other side of the Atlantic as US data such as PPI, retail sales, jobless claims and crude oil inventories loom.
On the technical front, the STOXX-50 index continues its slow dance around its all-time high just below 5,000.0pts, while indicators still don’t show any bearish threat.
Pierre Veyret – Technical analyst, ActivTrades
Source: ActivTrader
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