- The probability of an interest rate hike by the Fed in May increases after Friday's good data from the US labor market
- The key data for the markets this week will be the CPI inflation release for March in the US
- US banks will start earnings season with financial reports releases rom Q1 on Friday
US indices opened lower after a longer weekend which started on Friday in the US. Despite most markets being closed today, US trading run as normal. Stocks in the US decreases after good Friday's data from the US labor market which increases the likelihood of an interest rate hike in the US in May. Currently, the probability of a 25 bp rate hike is estimated at 70%. From the perspective of May's rate hike, the key will be inflation data which will be released on Wednesday. Inflation is expected to fall to 5.2% y/y from 6.0% y/y. On the other hand, core inflation is expected to increase to 5.6%YoY from 5.5%YoY.
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Open account Try demo Download mobile app Download mobile appThe US500 is decreasing over 0.8% today and is testing 4100 level along with rising US yields. If the last local lows are broken, the next important support will be around 4080 points. Higher futures volatility should take place not only on Wednesday but also on Friday, when we will get financial results of companies such as JP Morgan, Wells Fargo, Citi and Blackrock. Source: xStation5
Company news:
• Pioneer Natural Resources (PXD.US) is up over 8% at US open after the Wall Street Journal reported the company was in early talks with Exxon Mobil about a potential acquisition. Pioneer Natural Resources operates in the US shale oil industry
• JP Morgan, Citi, Wells Fargo will publish financial results this Friday. Investors will be watching how banks performed in the current challenging environment of high interest rates and the recent turmoil of financial industry.
• Tesla (TSLA.US) is falling at the start of the session after Elon Musk announced that the company plans to build a battery factory in China and decided to cut US prices for the fifth time this year
• Micron Technology (MU.US) gained about 5% at the start of the session after Samsung announced plans to cut production of its chips, which could push up their prices.
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