The EUR and JPY are also higher vs the USD (the USD is lower) to start the US trading day.
Regarding the UK inflation, it surprised to the upside in April, with headline CPI rising by 3.5% year-over-year (vs 3.3% expected, prior 2.6%). Core CPI climbed to 3.8% (vs 3.6% expected), and services inflation surged to 5.4% (vs 4.8% expected), pointing to persistent underlying pressures. The stronger-than-expected data significantly dents hopes for aggressive rate cuts from the Bank of England, with markets now pricing in just one 25 bp cut by year-end—if that. The report reinforces the view that inflation, not weak growth, is the dominant risk facing central banks, aligning with similar concerns for the ECB and the Fed.
Late yesterday, Cleveland Fed President Beth Hammack spoke and expressed concern over recent sentiment data, noting it reflects unease about the economic outlook. She emphasized that the Fed faces a tough balancing act if both inflation and unemployment become problematic. Hammack stressed the importance of monitoring how business decisions are affected by trade policies, and for now, believes the Fed’s best course is to “sit on its hands” and evaluate data closely while engaging with communities. She added that inflation expectations remain well-anchored, but any shift in those expectations could prompt the Fed to take action. "Uncertainty" is the key theme for Fed officials. The undercurrent is the fear of inflation but the economy matters too. So eyes are pealed to the data.
Dow Industrial average futures are down -325 points after falling -114.83 points or -0.27% yesterdayS&P index futures are implying a decline of -35 points after yesterday's -23.14 points or -0.39% declineNasdaq futures are implying a decline of -131 points after falling -72.75 points or -0.38%
In the European markets, the major indices are lower at the start of the US session:
German Dax, -0.21%France's CAC, -0.66% UK FTSE 100, -0.02%Spain's Ibex, -0.36%Italy's FTSE MIB, -0.24%2-year yield 4.002%, +3.2 basis points5-year yield 4.119%, +5.2 basis points10-year yield 4.544%, +6.4 basis points30-year yield 5.035%, +6.8 basis points
In other markets:
Crude oil up $0.65 at $62.86Gold is up $20.44 or 0.62% at $3310.34Bitcoin is trading down $353 at $106,502. Intraday high price reached $108,035 This article was written by Greg Michalowski at www.forexlive.com. Read More Details
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