The EU, the UK and Japan are all set to release their cost of living indicators this week including inflation data. In the past this data hasn’t caused all that much market movement, but in light of this years’ focus on inflation, the releases could be set to increase volatility, with traders speculating when current interest rates might change.
The UK’s release on Wednesday will be one of the most highly anticipated. With an expected annual Consumer Price Index (CPI) of around 2.7% all eyes will be on the pound’s market movements. Increasing in strength against the dollar, the pound recently hit its best levels since early August, marking a turn in trader sentiment and clawing back some of the losses GBP/USD has made since beginning April’s downward slide.
However, major changes to UK rates are not expected unless the inflation number is much high than expected. Traders could be waiting on the UK leaving the EU before the Bank of England will initiate any real changes.
Turning to stock markets, US stock markets remain stable. Last week’s 10-year anniversary marking the start of the 2008 financial crisis, which began with Lehman Brothers implosion, serves as a reminder that a crisis can always be just around the corner. But with the S&P 500 staying within 1% of its all-time high, traders for now seem happy to buy the dips at the first signs of any sell-off.
Apple’s showcase event provoked a lot of focus for the tech company’s shares and continued to push the boundaries on how much consumers are prepared to pay for a smartphone. In terms of share price, at the end of last week Apple’s were trading at less than half a percent below its all-time high. The Apple share price has risen by a third during 2018.
While Apple has been celebrating, other markets haven’t been experiencing as much action. Gold isn’t faring well due to overall stock market increases, trading around 10% lower for the year to date.
The other notable commodity – oil– continuous its volatility, but isn’t showing much direction one way or the other to mark any definite major market moves. Traders are taking advantage of any weakness to mid-$60-a-barrel area, however they are showing little conviction over the $70 mark and continue to take profits on rallies to this level.