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US Consumer Data Due
Ahead of the weekend, traders will be looking to the UoM Consumer Sentiment and Inflation Expectations readings as the final key data of the week. On the back of softer-than-forecast US CPI and PPI across the week, US rate hike expectations for June have sunk. However, the resulting market reaction has leaned towards firmer equities prices, particularly in the tech sector. The Nasdaq has broken out to fresh highs this week amidst a downturn in US rate expectations. If today’s data comes in weaker than expected also, this narrative will likely be reinforced which will likely see tech stocks pushing higher near-term.
Expectations for Today
On the numbers front, the market is looking for Consumer Sentiment to soften to 63 from 63.5 while inflation expectations were last seen at 4.6%. Data in this area or below should help drive the current rally. Indeed, given the backdrop, even unexpected strength in today’s data is unlikely to derail the rally. One caveat to this is a downside shock. Given the growing recessionary concerns in the US, if today’s consumer sentiment data is seen sharply undershooting forecasts, this might lead to stronger safe haven demand for USD, limiting upside in equities for now.
Technical Views
Nasdaq
The rally in the Nasdaq this week has seen the index breaking out above the 13237.4 level, trading up to fresh highs for the year. With momentum studies bullish, and supported by the rising channel, the focus is on a further move higher towards the 13752.6 level next.
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With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.