Hopes for more dovish global monetary policies got a boost earlier today, as new CPI (inflation) data from the UK and Australia was lower than expected.
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Risk-on sentiment will have received at least a small boost this morning from the releases of CPI (inflation) data in the UK and Australia, with both showing inflation running cooler than was widely expected. Annualized inflation in the UK was expected to be 3.0% but is 2.8%. In Australia, the expectation was for 2.5% but 2.4% was the actual number. This might give a small tailwind to stock and risky assets which have already been showing a recovery over recent days.
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Stock markets mostly made solid recoveries yesterday, especially in the USA, where many analysts think we have already seen the medium-term bottom. Although yesterday’s rally seemed to run out of steam during today’s Asian session, yesterday’s consecutive close by the S&P 500 Index above its 200-day simple moving average is a bullish sign.
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President Trump’s tariff D-Day is due next week on 2nd April. Trump tweeted a few hours ago that he has the tariffs set but also states that although there will be few exceptions, he will be “reciprocal” but also “lenient”. He also mentioned that Mexico and Canada had “stepped up”. Markets will take these comments as dovish, and again, this should provide a tailwind for risk-on sentiment, even if just a small one.
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Gold remains in focus after it continued to rise over into record blue-sky territory last week, trading at a new all-time high above $3,050 and threatening to reach even higher prices. However, the price has made a bearish retracement and is now about one day’s average range off the high. Trend traders will still be bullish on Gold.
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US Copper futures gained again yesterday to reach a new record high on strong bullish momentum. There is plenty of demand for this industrial metal which is widely used in AI applications, so it could be a good trade or investment on the long side. Copper micro futures are relatively cheap, with a position size of about $10,000. For smaller amounts, retail investors can look for spot Copper CFDs or ETF (CPER) alternatives to participate.
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In the Forex market, since Tokyo opened today, the strongest major currency is the New Zealand Dollar, while the weakest is the Japanese Yen, which is a classic risk on trade although most traders prefer to use the AUD/JPY currency cross to exploit this kind of momentum. The EUR/USD currency pair remains in focus, but that is because it has been reaching new multi-month highs and is close to a valid long-term bullish trend.
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The UK’s annual budget will be announced today by the British government.
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It may be a relatively quiet day in markets as there are no high-impact data releases scheduled today.
