Today there will be a great many publications to keep investors busy. The most important reports of the day will be the April inflation rates data from the United States, to be published later in the day, followed by statements from several Federal Reserve representatives.
Though increases in inflation have historically been very significant for currencies, this time around the dollar will probably not weaken any further due to high inflation rates. Instead, look to US Treasury bond yields to absorb the impact of the reports; they might increase further.
Earlier today Germany already published its own inflation numbers, which met the forecasts perfectly. Most importantly, YoY inflation in April rose to 2%, which is seen as the gold standard among economists.
Eurozone data on industrial production was a little disappointing - it grew to just 10.9%, while the forecast was 11.6%. There is also an ECB meeting today, but monetary policy will not be discussed.
It is also a big day for UK markets. The United Kingdom published GDP data for the first quarter of 2021, which was broadly better than the forecasts. The only exception was the preliminary growth rate for the past quarter, which met the forecast of -6.1%. All other GDP indicators were better than anticipated, as were the industrial and manufacturing production reports and the March goods trade balance.
US stock indices today are expected to trade lower than yesterday due to the upcoming inflation rate reports in the United States and their possible impact on the market.
Taiwanese stocks also experienced a crash earlier as many retail investors were pushed away due to margin calls. The semiconductor manufacturing companies in Taiwan suffered losses. They have not benefited from the semiconductor shortage in the global market.
Last but not least, there are some signs of a slight improvement in the relationship between the United States and China, as the US decided to remove Xiaomi from its blacklist. Still, the situation with China’s other tech giant Huawei remains tense.
