The European currency went further down the other days, dragging along the EUR/USD major to fresh lows in the 1.1300 vicinities. The spot accelerated downwards after the US CPI (Consumer Price Index) came out above expectations for the month of April, posting a 0.4% advance on a monthly basis versus a 0.3% forecasted figure. The core CPI (excluding food and energy prices) matched the expected 0.2% month-on-month while the headline CPI had a 1.1% advance (previously 0.9%). For which regards Building Permits and Housing Starts, the results came in mixed at 1.116 million, respectively 1.1172 million for the month of April.
Looking over the freshly released minutes from the RBA (Reserve Bank of Australia) meeting of May 3rd when the interest rates have been cut by 25 basis points to the 1.75% level we can see that the bank noted: “Although the March quarter outcome for the CPI reflected some temporary factors, the broad-based softness in prices and labor costs signaled less momentum in domestic inflationary pressures than had previously been expected”. Regarding the Aussie, they said that a lower value of the pair, close to the 2013 levels is aiding the economy, but if a rise would occur, things will not be that simple.
Yesterday UK’s ONS (Office for National Statistics) announced that the consumer prices went up by 0.3% in the month of April on a yearly basis while March’s hike was of 0.5%. Analysts have predicted no growth for April. On a monthly basis, the CPI rose 0.1% – lower than the 0.3% hike expected and also under March’s 0.4%. Core inflation (prices excluding food and fuel costs) went down under the expected 1.2%, posting a 1.5% loss for the month of March while investors expected an April core inflation of 1.4%. ONS’s head of CPI, James Tucker, explained that the main reason for the drastic price drop was the fall in airfares, which in the month of March were “corrupted” by the Easter timing.
The WTI (West Texas Intermediate) barrel went back up, posting yesterday in the vicinity of the $48.00 mark, after a correction in price at $47.50 per barrel area. In the early trade, prices have recovered very close to the $48.5 per barrel, levels are seen last year in October, triggering a knee-jerk reaction right after and moving towards the mid $47.00s range. The main reasons for the recent tone in the WTI are the Canadian wildfire, the Nigeria disruptions in the oil production after the recent attacks and last, but not least, the bullish remarks from the Goldman Sachs report.
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