U.S. Dollar Quiet as Markets Globally Tumble
MAY 11, 2021
The U.S. Dollar is trading in familiar ranges after a day of losses across markets based on fears about inflationary growth and what that may mean to the growth outlook going forward.
A gauge of U.S. inflation expectations reached its highest level since 2006. Naturally, equity wonders are wondering right now how long it will be until the Fed is forced to act if prices get in the way of growth, especially in employment. We shall see Consumer Price Index figures tomorrow and if volatility is higher, giving us more FX movement.
Colonial Oil restarted operations, but at limited capacity after having to shut down during the weekend because of the cyberattack. A number of companies in the industry have come out to explain the vulnerability our country’s energy grid faces. On the other side of that market, OPEC is expected to release production estimates and forecasts later today, potentially impacting petrocurrencies like Mexican Peso and Canadian Dollar, thus far beneficiaries of the chaos surrounding supply and oil price resurgence. At 10 AM, we get March figures for JOLTS Job Openings. A number of Fed speakers will also give their take throughout the day, so we will monitor for anything exciting.
What to Watch Today…
- JOLTS Job Openings 10 AM
The Euro remained around a 2-month best after hitting the brakes overnight. European equities have also dwindled as a result of a rout in the technology sector, which has faced some questions about the pace of earnings and ability to progress with ongoing issues like the microchip shortage.
Nevertheless, the Euro-zone is in better shape than before in the COVID crisis as Italian Industrial Production increased better than expected in March and German ZEW Expectations for May were way better than anticipated, meaning there is confidence in the economic recovery.
Sterling has improved to its strongest point since February as elections that threatened to be a catalyst for the potential separation of the United Kingdom resulted in nothing major. Although there is a need to address separationist sentiment, not the U.K. government has time to make its case instead of having to rearrange lawmaking or borders. More importantly, the U.K. is elated to be readying itself for lifting restrictions and allow gatherings.