It is not often that the financial markets are compared to buses, but the data has been light this week and suddenly we have the double-whammy of an US inflation report and the Federal Reserve decision. Although US rates are expected to remain on hold, the lower bound at 5.25% and the upper bound at 5.50%, the underlying inflation pressures will be of more interest. The consensus is 0.1% mom and 3.4% yoy, any upward would be a concern for Jerome Powell. The thoughts are that the new dot plot will indicate two 25-basis-point cuts this year, compared with three in the March version.
Overnight the Nasdaq hit a new all-time high, however, in China, consumer prices rose less than expected in May and factory prices dropped for the 20th month in a row, fuelling concerns over persistently weak demand. This is adding to a 'risk-off' attitude in the likes of Iron Ore.
Domestically, the GDP figures, which were out at 7am, showed the UK economy failed to grow in April but on a brighter note, shares in computer firm Raspberry Pi soared as much as 40% yesterday after they began trading on the London Stock Exchange. The Cambridge-based business is known for creating affordable credit card-sized computers designed to boost coding skills among children. Shares hit 392p in early trading on Tuesday, above the initial public offering (IPO) price of 280p.
Marketwise the yield on 10-year Treasuries was little changed at 4.41%, Bitcoin rose 0.2% to $67,414.57, West Texas Intermediate crude rose 0.6% to $78.35 a barrel, Spot gold fell 0.2% to $2,313.12 an ounce, USDJPY opens at 157.20, GBPUSD 1.2745 and EURUSD 1.0750.
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