Daily Alert [text] – Thursday 23rd May 2024: Fed gets a wee bit more hawkish

Mark NugentDaily Alert, May 2024

Daily Alert – Thursday 23rd May 2024: Fed gets a wee bit more hawkish

Yesterday’s Fed Meeting Minutes showed continued concern about persistent inflation. Moreover, some Fed voters have put the possibility of a rate hike back on the table. The USD rose but the US 10-year yield and equities seemed to care not a jot.

Over in the UK, Prime Minister Sunak called an election for the 4th July. It was said to have been, at least in part, prompted by the CPI numbers released yesterday showing a significant move down in inflation relative to the prior number, but actually missing this month’s expectation to the upside. Headline CPI, year-on-year April, came in at 2.3% vs an expectation of 2.1% (3.2% in March). Core CPI, year-on-year for April, came in at 3.9% vs an expectation of 3.6% (4.2% in March).

German and eurozone PMIs are looking a bit healthier than they have in a while. Composite and Manufacturing PMIs beat expectations to the upside in both territories, as did Services PMI in Germany. The only sour note was Services PMI in the eurozone, missing to the downside.

It was not quite so good in the UK as both Composite and Services PMI missed to the downside, Manufacturing beating expectation to the upside.

Yesterday, Nvidia’s results kept the AI-driven bullish equities streak alive with stellar Q1 results.

US equities are grinding upwards. GOLD is taking a bit of a tumble on the hawkish Fed minutes. WTI is flirting with the bottom of its recent range. USDJPY continues to rise (showing a weak Yen), thumbing its nose at the Bank of Japan. The USD is rising, but neither the EUR nor the GBP are falling. So, in summary, I am not seeing any attractive setups.

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