Ahead of the expected US consumer pricing data on Thursday, Asian stocks saw an increase, driven by a surge in the world’s largest tech companies, leading to record highs in global shares.China, Australia, and Japan all experienced stock market gains on Wednesday following a positive session on Wall Street. The decline of the Dollar against most major currencies prior to significant US inflation data suggests a potential reduction in price pressure and an increased likelihood of interest rate cuts by the Fed. Anticipation for the upcoming US consumer pricing data contributed to the rise in Asian stocks, fueled by the strong performance of the world’s biggest tech firms, which propelled global shares to all-time highs. Taiwan Semiconductor Manufacturing, the exclusive supplier of Nvidia and Apple’s most advanced chips, reached record highs after reporting its second-quarter revenue growth at the highest rate since 2022. Sony Group, Tencent Holdings, and Korean chipmaker SK Hynix were also key contributors to the regional stock index increase, with SK Hynix trading at its highest levels since 2000.In May, the UK’s GDP grew by 0.4% month-on-month, surpassing expectations and posing an upside risk to the Bank of England’s Q2 GDP forecast. The service sector and construction contributed significantly to this growth, with retail showing a rebound from a wet April. Despite potential factors like National Insurance rate changes and erratic weather, the broader picture indicates a 0.9% GDP growth over the past three months, primarily driven by the service sector. This growth is considered above-trend. While upcoming labor market and inflation data are important for the August Monetary Policy Committee vote, recent comments from certain members suggest that the data does not support an increased probability of an early rate cut.Since 2021, US CPI has often surprised to the upside, indicating a shift in the Fed’s policy outlook. However, the recent soft news on fuel and airfares is not expected to repeat. Markets expect a slight increase in June CPI, with annual rate estimates slightly above the median forecast. While Powell is considering a potential rate cut, some argue it may be premature. The reliance on flexible prices to reduce inflation poses a risk, and more progress is needed on sticky items. Small upside surprises this month could cause uncertainty in the market regarding the timing of the first rate cut.
Overnight Newswire Updates of Note
Sweden PES Unemployment Rate Jun: 3.4% (prev 3.2%)
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
FX Options Expiries For 10am New York Cut (1BLN+ represent larger expiries, more magnetic when trading within daily ATR)
CFTC Data As Of 5/7/24
Technical & Trade ViewsSP500 Bullish Above Bearish Below 5550
EURUSD Bullish Above Bearish Below 1.0750
GBPUSD Bullish Above Bearish Below 1.27
USDJPY Bullish Above Bearish Below 160
XAUUSD Bullish Above Bearish Below 2345
BTCUSD Bullish Above Bearish below 60000
Primary objective is 54500 – TARGET ACHIEVED NEW PATTERN EMERGING 
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