What you need to know on Wednesday, May 13:
US inflation fell sharply in April. According to the official release, consumer prices fell by 0.8% MoM in April, the largest fall since 2008. Annual inflation increased by approx. 0.3%, while the annual core CPI came in at -0.4% amid falling oil prices. The news hit the greenback during US opening hours.
The market sentiment was mostly sour, amid ongoing tensions between the US and China, and news of at least six new cases of coronavirus in Wuhan, China, where the pandemic was lit.
The pound came under sales pressure as the market tries to digest British Prime Minister Johnson’s plan to bring the kingdom out of lockdown. Finance Minister Rishi Sunak also announced that the furlough scheme would be extended until the end of October. This means that the government will continue to support approx. 7.5 million People at a cost of £ 14bn About a month, though, Sunak added that the government would ask businesses to “start sharing” part of such costs starting next August.
Wall Street struggled around its opening levels most of the day, though indexes collapsed before closing, with DJIA losing about 450 points. Nasdaq and S&P cast over 2.0% each. Commodity-linked currencies came under sales pressure and closed red against greenback.
US Treasury yields continued to fall throughout the day, and the yield on the 10-year note fell to 0.66%.
Items spent the day in consolidation mode and made modest progress within well-known levels.