Summary:
- Stock markets have rallied today after Xi de-escalated trade tensions
- Oil surges higher as reports say Saudi aiming for $80/barrel
- US inflation rises more than forecast but Gold edging higher
- Turkish Lira slumps to new record lows
- Cryptocurrencies make steady gains
It’s been a good day for stocks, with indices around the globe soaring higher. There has been a marked improvement in sentiment amongst traders following some soothing rhetoric overnight from Chinese president Xi concerning the recent trade tensions.
Another market enjoying a strong move higher is oil, with Brent moving above the $70/barrel handle to trade near a 3-year high. The catalyst for today’s gains has been tensions in the Middle East rising once more following the latest chemical attack in Syria with reports this afternoon that US President Trump has cancelled a trip to South America to oversee the US response. According to diplomats the US has requested a UN Security Council vote at 3pm ET (7PM BST) on a draft resolution to set up inquiry into the recent chemical weapons attacks in Syria and this is obviously a situation that traders will be watching very closely.
On the data front the US PPI M/M for March increased to 0.3% from 0.2% previously (0.2% expected) suggesting that price pressure are rising. There has been a fairly clear uptrend in this inflation metric in recent years with both the headline and core prints showing steady gains. Wednesday’s CPI release typically garners far more attention and given the fairly strong correlation between these two there’s a fair chance we get a higher reading tomorrow and that could well see some larger moves.
The Turkish Lira has suffered in recent years and despite appearing relatively cheap for some time now it has continued to decline, with further losses of more than 1% seen today. Both the EURTRY and USDTRY have hit all-time highs today as the Lira continues to slide almost unabated. The EURTRY has surged higher so far this week and the cross now trades around 5.10 at a new record peak. Around this time last year the French election outcome saw the Euro set off on a strong rally and the pair has risen an incredible 33% since April 2017.
Crytpocurrency markets are making some measured and steady gains today with all 5 markets in the green on the European close. The Soros bounce last week proved a little short-lived but the selling has eased off at least with Bitcoin trading higher by just under 2% at 6780 at the time of writing.