Daily digest market movers: Gold retreats as US yields rise
- Friday’s economic data revealed that Industrial Production was 0.1% MoM, up from -0.5% contraction in January, and exceeded the consensus.
- Separately, the University of Michigan Consumer Sentiment on its preliminary reading was 76.5, below estimates and the previous reading of 76.9. Americans expect inflation to remain at 3% in the 12 months from March and for five years at 2.9%.
- The PPI was strong, at 1.6% YoY, up from 0.9%, while the core PPI stood at 2%, unchanged, with both figures exceeding the consensus.
- The US Department of Commerce revealed that Retail Sales missed estimates of 0.8% MoM and rose 0.6%, still an improvement compared to the prior month’s reading of -1.1%.
- The labor market remained tight as Initial Jobless Claims for the week ending March 9 dipped from 210K to 209K, below estimates of 218K.
- Given the backdrop of consumer and producer price indices in the US showcasing reaccelerating inflation, Fed officials should refrain from easing monetary policy.
- During last week's testimony at the US Congress, Fed Chairman Jerome Powell said that inflation is cooling while acknowledging that they could ease policy late in the year. However, he emphasized that it would depend on incoming data reassuring policymakers that inflation is sustainably moving toward the Fed’s 2% goal. The Fed’s next meeting is scheduled for March 19-20 next week.
- According to the CME FedWatch Tool, expectations for a May rate cut remain low, having dropped to 11% from 22%. However, the odds for June stand at 64%, down from 72%.
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