Wednesday’s market action was subdued as global investors kept their eyes on the horizon, awaiting Thursday’s highly anticipated U.S. inflation report. While most major asset classes hovered in tight ranges, underlying macro signals remained active — with hawkish Fedspeak, weak Chinese trade data, and fading oil momentum shaping the session.
U.S. – Steady Hands at the Fed, Eyes on CPI
Markets in the U.S. barely moved as Minneapolis Fed President Neel Kashkari threw cold water on imminent rate cut hopes. His comment that the Fed “may hold rates steady all year” if inflation proves sticky added another layer of caution ahead of March CPI.
Bond yields crept higher, with the 10-year Treasury yield climbing to 4.37%, reflecting modest risk-off sentiment. Meanwhile, the U.S. dollar gained ground, pushing the DXY to 104.20, its highest level in nearly a month. Stock markets held up fairly well — the S&P 500 was nearly unchanged, and the Nasdaq slipped just 0.1%.
📌 All eyes on March CPI: Headline inflation is expected to come in at +3.4% YoY, with core CPI at +3.7% YoY. A surprise here could decisively swing the Fed narrative.
Eurozone – ECB Signals June Cut, Euro Slips
While U.S. policymakers are treading carefully, the ECB appears to be locking in a June rate cut. Board member Klaas Knot reinforced this outlook by stating the bank is “gaining confidence” in the disinflation trend. But the markets still want to see more data.
The EUR/USD pair fell to 1.0740, its lowest in two weeks, reflecting both dollar strength and caution over Europe’s growth outlook. Meanwhile, Germany’s bund yield edged down to 2.36%, as traders priced in a dovish ECB path. Eurozone equities ended the day slightly in the red.
U.K. – Markets Drift Without Data
In the absence of fresh macro updates, the FTSE 100 slipped by 0.3%, mirroring global trends. Gilt yields rose modestly, with the 10-year climbing to 4.09%, following the U.S. lead.
Next week’s CPI and labor market data are expected to be key for the BoE’s policy direction.
China – Trade Slump Sends Mixed Signals
China’s latest trade report disappointed across the board. March exports dropped 7.5% YoY, far below expectations, while imports also fell 1.9% YoY, suggesting both external demand and domestic consumption are weakening.
Despite the bleak data, the Shanghai Composite eked out a 0.2% gain, possibly supported by expectations of future policy support. In contrast, the Hang Seng fell 1.3%, driven by tech losses and continued investor caution.
Japan – Yen Watch Intensifies
The yen continued its descent, with USD/JPY touching 152.85, creeping dangerously close to levels that could trigger official intervention from the Bank of Japan or the Ministry of Finance. For now, Japanese officials remain silent, but traders are on high alert.
Meanwhile, bond markets were steady, and the 10-year JGB yield held at 0.78%.
🌍 EMEA Highlights
Turkey
The lira traded flat near 32.20, as the market awaits more details on the April inflation print, which will shape expectations around the Central Bank’s next move. The BIST100 index fell 0.4%, reflecting the cautious global tone.
Brazil
The real weakened to 5.10/USD, and the IBOVESPA declined by 0.6%, dragged by softer commodity prices and speculation the BCB may pause rate cuts if inflation pressures linger.
🌐 Commodities & Crypto – Oil Drops, Gold Shines, Crypto Rebounds
🔻 Oil plunged, with WTI falling 3.1% to $84.20, as U.S. crude inventories unexpectedly surged by 5.8M barrels, according to EIA data. This wiped out much of the geopolitical premium built in recent sessions.
🟡 Gold remained resilient, holding near $2,344/oz, supported by inflation uncertainty and central bank demand.
💻 Crypto markets bounced, with Bitcoin climbing to $69,000 and Ethereum hitting $3,580, as traders bet on favorable CPI dynamics.
Top Crypto Performers:
- Render (RNDR) +5.3%
- Sei (SEI) +4.7%
- Dogecoin (DOGE) +4.1%
📌 Final Thoughts
Markets are in “wait-and-see” mode, with CPI likely to set the tone for not just the week, but possibly the rest of the month. With Fed officials leaning cautious, any surprise in inflation could rapidly shift the macro narrative. Volatility may be just around the corner.
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