Summary:
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PPI readings top estimates; Initial jobless at 49-year low
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US stocks set to open near 2019 highs
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S&P500 probing the 2900 handle once more
Two second tier pieces of data from the US in the past hour have come in at levels that alert the attention with the latest inflation figures moving above 2% while unemployment claims fell to their lowest level in 49 years. For March, the PPI Y/Y reading of +2.2% was a fair way above the 1.9% expected, and marks a sizable jump on the 1.9% seen previously. However, this could well be driven in large part by the rising oil prices, with a core measure which strips out energy and food matching expectations in printing 2.4% Y/Y. Looking closer at the figurtes a 16% rise in gasoline prices over the period obviously skewed the headline higher.
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The headline PPI rose in the latest release, but this can be explained by the large increases in gasoline prices and the core measure was pretty much flat. Source: XTB Macrobond
At the same time there was more strong data on the US labour market, with weekly initial jobless claims falling to a 49-year low of 196k.The drop was a surprise against an expected 210k following a print of 204k prior. Last week saw the NFP report post an impressive recovery and whichever way you look at it the US employment situation is presently in rude health.
Initial jobless claims fell to its lowest level since 1969 in the past week and the metric continues to follow the unemployment rate lower. Source: XTB Macrobond
US stocks are trading mildly higher ahead of the opening bell with the S&P500 set to begin the cash session close to its highest level of the year. The market is probing the big psychological 2900 level and has recovered from some weakness seen on Tuesday. Price dipped below the H1 cloud in what could have been seen as an early sign of some weakness but the bears failure to push below 2877 has seen them rescind their advantage and now bulls have the opportunity to push up towards all-time highs around 2946. The RSI has pulled back from overbought territory to now trade at a slightly elevated 62.0 level.
US stocks have remained well supported after a little pullback and a break above 2900 would pave the way for a run at all-time highs around 2946. Source: xStation
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