Reports by Israeli media that Netanyahu has met with Finance Minster Smotrich.

This is being cited as part of the progress made in the Cairo negotiations.

Without more context not sure whether this matters but worth keeping in mind in case we get more information.

Here are some previous updates on the geopolitical developments:

• Israeli ground operation in Rafah depends on the hostage deal
• Senior official says gaps to a deal between Israel and Hamas remains large
• Oil is recovering some of its earlier loss
• Reports that progress has been made in Gaza ceasefire talks

This article was written by Arno V Venter at www.forexlive.com.

US treasury yields have continued to push higher, printing a new 2024 high (also highest since November last year).

As commodities stay supported, and as expectations of a higher-for-longer Fed continues to build, it makes sense why yields are pushing higher.

The divergence between yields and the USD, and gold and yields is a bit confusing.

The main event for the week ahead is US CPI coming up on Wednesday. With growing expectations of a re-acceleration in inflation, a big surprise miss would arguably be the most exciting opportunity to trade this week.

This article was written by Arno V Venter at www.forexlive.com.

Last Friday, the Nasdaq Composite ended the day
positive following the US NFP report.
In fact, the data beat expectations across the board showing once again that
the labour market remains resilient without too much inflationary pressure as
wage growth continues to ease. The focus will now switch towards the US CPI
data on Wednesday as a hot report could change the Fed’s strategy in the near
term and delay the rate cuts further.

Nasdaq Composite Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the Nasdaq
Composite has
been diverging with
the MACD for a
long time. This is generally a sign of weakening momentum often followed by
pullbacks or reversals. The price recently broke out of the rising wedge which
opened the door for a bigger correction into the 14477 level. The price has
been consolidating around the highs for quite some time now and we will likely
need to wait for the US CPI report on Wednesday to decide where to go next.

Nasdaq Composite Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the
price last Friday rallied following the goldilocks NFP report and it’s now
trading back above the critical 16206 level. If the price were to continue
lower and fall below the 16206 level again, we can expect the sellers to pile
in more aggressively to extend the drop into the first support level
at 15929. That’s also where we can expect the buyers to step in with a defined
risk below the support to position for a rally back into a new all-time high.

Nasdaq Composite Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action with the price getting rejected several times
from the black counter-trendline except
the fakeout on the 4th of April. We can also notice that the latest
leg lower diverged with the MACD, which might give the buyers some more
conviction for further upside. In fact, if the price were to break above the
counter-trendline, we can expect the buyers to increase the bullish bets into
new highs, while the sellers will likely lean on the trendline to position for
a drop into new lows with a better risk to reward setup.

Upcoming
Events

This week is going to be a bit more tranquil on the data
front with the US CPI being the main highlight. On Wednesday, we have the US
CPI report which will likely decide if the Fed is going to delay rate cuts
further. On Thursday, we get the US PPI and the latest US Jobless Claims
figures. Finally, on Friday we conclude the week with the University of Michigan
Consumer Sentiment survey.

This article was written by FL Contributors at www.forexlive.com.

Some interesting points from ING about 10-year yields, and the risks they see that could take us back to 5%.

• Unlike previous cycles where the 10-year yield typically decreased after the Fed’s rate peak, in the current cycle, the yield has actually increased, hitting a cycle high of 5% in October 2023, three months after the presumed rate peak
• Contrary to expectations following a „Fed peak moment,“ market rates have not decreased significantly. This is attributed to strong labor market data and intermittent increases in inflation.
• Historically, market rates tend to increase temporarily when the Fed makes its first rate cut, as market participants sell on the fact. However, as the Fed continues to cut rates, the 10-year yield eventually decreases and finds a new bottom.

• The current cycle has not seen the typical initial decrease in the 10-year yield following the Fed’s rate peak, partly due to a relative shortage of longer-dated Treasuries from the Federal Reserve’s pandemic-induced holdings.
• The article highlights uncertainty regarding whether the Fed has actually peaked, as there has been no clear data justifying a rate cut, which would confirm the peak.
• The ongoing strength of the economy and anticipated inflation readings are expected to maintain or even increase the pressure on the 10-year yield, possibly pushing it to retest the 5% level or even higher.

Useful info to consider. At the end of the day it’s all still about inflation. There is a lot that can happen before the Fed’s June meeting in terms of the data, and the data will lead the way.

This article was written by Arno V Venter at www.forexlive.com.