The USD sell-off seems to have paused amid rising US Treasury bond yields
Wall Street stocks advanced on Tuesday, with tech shares leading the gains along with the battered banking sector. The Dow Jones rose 1.34%, the S&P 500 rallied 2.02% and the Nasdaq Composite added 2.76%. On the data front, US retail sales rose 0.9% in April, in line with projections, while industrial production rose 1.1% in April, well above the 0.5% estimate. In individual stocks, Walmart shared plunged more than 11% after the retailer reported worse-than-expected earnings and also lowered its profit forecast. On the positive side, shares of Home Depot gained 1.7% following better-than-expected quarterly results.
Asian stocks saw mixed results on Wednesday as the recent rally momentum started to abate following three bullish sessions in a row. MSCI’s broadest index of Asia-Pacific shares outside Japan rose 0.5%. The Shanghai Composite Index lost 0.25% and the Hang Seng in Hong Kong gained 0.17%. Sydney’s S&P-ASX 200 advanced 1% despite the lower than expected Australian wages data. The Nikkei 225 in Tokyo rose 0.94% after the government reported Japan’s economy shrank for the first time in two quarters in the initial three months of the year.
European equities opened slightly higher today, trading nearly unchanged in early deals due to persistent worries about inflation and monetary policy tightening. The latest data showed that the UK CPI came in at 9% year-over-year in April when compared to 7.0% registered in March while missing estimates of a 9.1% rise. On a monthly basis, the UK consumer prices arrived at 2.5% versus 2.6% expectations and 1.1% prior.
Meanwhile, the USD sell-off seems to have paused amid rising US Treasury bond yields. The USD index bounced back into positive territory on Wednesday following three days of losses in a row. Still, the buck stays below the 104.00 mark, struggling around 103.50 during the early European hours ahead of the US construction data due later today. As such, EURUSD encountered the descending 20-DMA to settle just above 1.0500. The euro looks unlikely to exceed the moving average in the near term.