Fundamentals: Yesterday, the year-on-year growth rate of nominal and core data of CPI consumer inflation in the United States in April was weaker than the previous value. Investors are waiting for the release of April PPI inflation today. Market bets on the Fed raising interest rates by 25 basis points in June were cut to 0.4 percent from 21 percent, with multiple rate cuts still expected by the end of the year. Some analysts said that although the data increased the possibility of the Fed's imminent pause in raising interest rates, it also raised concerns that the slowdown in inflation is due to the looming recession. The two-year U.S. bond yield fell by the deepest 15 basis points and fell back to 4%. The Nasdaq rose 1% at the opening and hit the highest level in more than eight months. Component stocks closely related to the economic cycle pulled the Dow down. Once turned down, spot gold rushed up and fell back.
In terms of specific data, the U.S. CPI rose by 4.9% year-on-year in April, the 10th consecutive decline, the smallest year-on-year increase since April 2021, expected to be 5%, and the previous value was 5%; The previous value was 0.1%. The year-on-year growth rate of the core CPI, excluding the volatile energy and food products, slowed down slightly compared to March, rising by 5.5%, which was unchanged from the previous value of 5.6%. The April inflation data prompted traders to further bet the Fed would pause its rate hike cycle next month and could shift to easing policy as early as September.
The White House issued a statement saying that the CPI report showed some progress in the fight against inflation, but the risk of debt default is still the biggest threat to the US economy. Talks between U.S. President Joe Biden and congressional leaders on the issue after U.S. stock market hours on Tuesday were fruitless, and negotiations continued on Friday.
A number of European Central Bank voting committees spoke again. The head of the German central bank admitted that he may be entering the final phase of raising interest rates, the governor of the Greek central bank is expected to end raising interest rates this year, and the central bank of Portugal said that European interest rates are close to the peak and may cut interest rates in 2024. Later, some media said that some officials of the European Central Bank began to accept the view that "the need to raise interest rates in September" and the decline in German bond yields narrowed.