- European indices rose sharply on Thursday, with the German DAX jumping above the 14,000 mark for the first time since early June after fresh CPI data pointed that inflationary pressures are easing in the US.
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Dow Jones rose 2.70% and reached its highest level since August 2022, while S&P500 and Nasdaq jumped 4.35 and 6.0% respectively as cooling inflation raises hopes that Fed might start slowing the tightening pace in December.
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Following the CPI release Fed Daly said the time is now to step down on the pace of rate hikes. In her opinion inflation is one of the most lagging variables.
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On the flip side, her colleague Mester said that upside inflation risks remain and the Fed needs to press forward on rate rises.
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BoC Mackem believes that rebalance of the labor market is required in order to hit 2% inflation target
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The market movement came along with a weaker dollar and Treasury yields, which eased pressure on the tech sector. Microsoft, Tesla, Alphabet, Facebook, Apple, and Amazon, were up between 6% and 10%.
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The dollar index depreciated by nearly 2.0% to 108.50, the lowest in eight weeks. The most pronounced selling was against the yen, where the USDJPY pair recorded sharpest correction since the beginning of the pandemic, as well as risk-sensitive currencies such as the Australian and New Zealand dollars. The EURUSD pair jumped above the parity level.
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Weaker dollar and easing yields boosted prices of precious metals. Gold jumped above $1750, while silver tested $21.70 level.
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Oil price rose around 1.50% and erased some of the recent losses as some traders hope that inflation in the US already reached its peak
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NATGAS jumped above $6/MMBtu after the latest EIA report showed a smaller-than-expected storage build of 79 bcf.
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Cryptocurrencies launched a recovery move on Thursday supported by the overall positive sentiment, despite the ongoing worries over FTX exchange. Bitcoin rose over 10.0% and managed to climb above $17,000 while Ethereum failed to stay above $1300 level.
SILVER price surged 3.5% and is testing major resistance at $21.70 per ounce, which is marked by the upper limit of the 1:1 structure and 200 SMA (red line). Should a break higher occur, next target for buyers is located at $23.00 per ounce. On the other hand, if sellers regain control, another downward impulse towards support at $21.00 per ounce may be launched. Source: xStation5
