The U.S. Dollar is trading in stronger ranges, up to its best level overall in over a week per the Bloomberg Dollar Spot Index as the ceasefire becomes fragile in Week 11 of the conflict in the Middle East.
Brent Crude oil prices rose for a third straight day while all the other signs that we have become familiar with are back as talks of peace die down and a return to battle becomes more likely. Already some shots fired in the Strait of Hormuz and revelation that the U.A.E. has been launching secret attacks on Iran is keeping markets as well as global leaders on edge. A U.S. delegation headed with the President to China is seen as a possible catalyst for improving chances of a deal being made as the two largest global economies start feeling the impact of troubled trade and instability from the effects of discord.
Meanwhile, the enthusiasm for high-flying technology stocks is stagnating a bit with growing doubts about the sustainability of investment in A.I. and profitability for more than a handful of already big firms. At 8:30AM, we will get the release of April’s Consumer Price Index, which economists forecast to have climbed by 0.6%. This follows a March increase that was the highest pace since 2022. Suppliers’ side inflation will be out tomorrow in the form of Producers Price Index, Thursday will feature Initial Jobless Claims and Retail Sales for April, while Friday closes with last month’s Industrial Production.
What to Watch This Week…
- U.S. CPI 8:30AM exp. 0.6%
- U.S. PPI, Wednesday 8:30AM
- Monex USA Online is always open
EUR ⇓
The Euro has naturally lost some ground as market doubts grow regarding a potential deal that could give reprieve to economic outlooks. Indeed, investors and economists think that higher oil prices and broken international trade will lead to economic hardship. With growth already difficult to find, the Euro-zone countries as well as the Union as a whole may enter a period of contractionary pressures and anticipation of recession in some nations. For now, prices will be the main emphasis of everyone’s business equation as April’s CPI for Germany confirmed yet another climb, last month by 0.6%, taking the annual higher to 2.9%. There is a bit of good news out of Italy with March April Industrial Production coming in much higher than anticipated at 0.7% vs. 0.2%.
MXN ⇓
The Mexican Peso has been dwindling by half a percent in the past few days, a contrast from the 1.5% run of improvement it has since start of May. Mexico’s economic indicators lately have not been impressive with the latest addition to disappointment being highlighted by poor Industrial Production numbers in March. The Mexican economy has experienced two consecutive months of Industrial Production dropping by (-1.3%). We will get a clearer picture of how bad performance has been when Gross Domestic Product for Q1 is out next week.
