Headlines:

• Markets pensive awaiting US PPI data
• US unveils steep tariff hikes on Chinese chips, cars
• China expresses strong dissatisfaction to US tariff hikes
• BOE’s Pill: We can cut interest rates while maintaining restrictive policy stance
• BOE’s Pill: There is still some work to do on inflation persistence
• UK March ILO unemployment rate 4.3% vs 4.3% expected
• What has changed after the UK jobs data?
• Germany May ZEW survey current conditions -72.3 vs -75.8 expected
• US April NFIB small business optimism index 89.7 vs 88.5 expected
• OPEC leaves world oil demand growth forecast unchanged in latest monthly report

Markets:

• JPY lags on the day
• European equities little changed; S&P 500 futures flat
• US 10-year yields down 0.4 bps to 4.476%
• Gold up 0.3% to $2,343.71
• WTI crude down 0.2% to $78.95
• Bitcoin down 2.1% to $61,759

There were some headlines to move things along during the session but the bottom line is that markets are just waiting on the US PPI data that is to come later. We’re almost there now..

The US officially unveiled a host of steep tariff increases on Chinese chips and cars mostly, impacting roughly $18 billion worth of Chinese imports. That did little to shake market sentiment though as the move has been well telegraphed already.

Equities remain relatively muted amid a more pensive mood overall. The exception being GME and AMC – which are soaring in pre-market as the memes are back, baby!

In FX, there’s not much to really work with as the dollar is fairly muted as well. Major currencies are keeping in tight ranges awaiting the US PPI data for the next move.

The pound was a little softer early on as BOE chief economist Pill spoke but he didn’t really offer much of anything new. Cable fell to 1.2510 but has recovered back to flat levels around 1.2550 now.

It’s now all on the US PPI data to offer something up for traders. Otherwise, it’ll be another wait until we get to the CPI and retail sales data tomorrow.

This article was written by Justin Low at www.forexlive.com.

• China will take resolute measures to defend its rights and interests
• Calls for US to immediately correct its ‚wrongdoings‘ and cancel additional tariff measures
• Tariff hikes violates Biden’s commitment to not suppress and contain China’s development

This is the common response as per what we saw previously with Trump in the many years before. But at the same time, the Taiwan defence ministry says that it has spotted 23 Chinese military aircraft operation around its island today. Coincidence? Hmm.

This article was written by Justin Low at www.forexlive.com.

The chart of the S&P 500 E-mini futures shows how much the market hinges on the US inflation figures as we’ve been trading in a tight range for days. Before the US CPI, we will see the US PPI data today which will likely trigger a spike out of the range in either direction depending on the outcome.

The CPI is more important but given the worries around inflation, we might see the market turning more defensive into the CPI report if the PPI figures surprise to the upside. Conversely, soft readings might lead to a rally although I wouldn’t expect much follow through until the CPI is out of the way.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

Will we get to see some fireworks today? The US PPI data coming up later will be the one to watch. And it might take on much more importance, in terms of impact, considering that markets have been rather sidelined for over a week now. It’s all about how the US data will affect the Fed outlook at this point.

While the CPI report tomorrow is the be-all and end-all, we could get a taste of things to come from the PPI data later already. And for now, markets are looking rather pensive in the run up to that. Major currencies are extremely muted on the day with little change among dollar pairs as seen below:

The pound was the only notable mover earlier as it dipped slightly to 1.2510 before recovering back to 1.2550 levels now. But besides that, there is very little action overall.

In the equities space, European indices are also lightly changed with US futures still relatively flat at the moment. The same goes for bond yields and that’s a clear sign that traders are all sitting on their hands, waiting to potentially react later in the day.

This article was written by Justin Low at www.forexlive.com.

Both the forecast numbers are unchanged compared to the month before. The bloc notes that despite some downside risks, there is further upside potential for global economic growth this year.

This article was written by Justin Low at www.forexlive.com.