US inflation data due today - 10.5.2023

On Tuesday, the US dollar index rose slightly. Investors are expecting another increase in the US government debt limit ($31.4 trillion now). This must be done by June 1st. In general, there were no particularly important US economic indicators yesterday. Today will be published data on inflation (U.S. Consumer Price Index) for April. Some market participants expect it to decline to 4.4% y/y from the current level of 5%. This weakens the US dollar a little this morning. Since in the event of a strong decline in inflation, the Federal Reserve may reduce the rate (5.25%) at its next meetings. Inflation data for Denmark, Norway and Germany were published this morning, which turned out to be slightly better than expected. This contributes to a slight strengthening of the Danish and Norwegian kroner, as well as the euro. The next meeting of the National Bank of Poland will take place today. Rate changes are not expected (6.75%).

Bitcoin quotes have been in a trading range for 7 weeks with approximate borders of $30,500-26,800. The possible introduction of a new tax on cryptocurrency mining in the US (Digital Asset Mining Energy (DAME) has a negative impact on the crypto market. According to the Cambridge Center for Alternative Finance, the US holds the largest share in global mining (about 38%)

Yesterday the US stock indexes went down. This was mainly due to bad corporate news. In particular, PayPal Holdings and Skyworks Solutions lowered their earnings forecasts and their shares fell 12.7% and 5.1%, respectively. Quotes of Qualcomm fell by 2.3%, Broadcom, Qorvo and Corning - by more than 1%. Against this backdrop, the Dow Jones Financial Administration sectoral index fell 2.2%. The Walt Disney entertainment company will release its financial report today.

Oil prices rose on Tuesday. According to the China Ministry of Culture and Tourism, 5 holidays (Golden Week) the number of tourists in China in 2023 reached 274 million people. This is 17% more than in 2019 (before the coronavirus epidemic) and 71% more than in 2022. Increased tourism may increase the demand for transport fuels. India Ministry of Petroleum and Natural Gas announced an increase in oil imports in March 2023 by 7.9% y/y to 20.5 million tons. Quotations may also be supported by a fire in the Canadian province of Alberta. Because of it, oil production in Canada will temporarily decrease by 140 thousand bpd. U.S. Energy Secretary Jennifer Granholm announced plans to replenish the Strategic Petroleum Reserve. However, this morning oil is getting a little cheaper. The negative factor was the report of the independent American Petroleum Institute about an unexpected increase in US oil inventories for the week by 3.6 million barrels. Official data on changes in US oil inventories will be published tonight.

Natural gas in Europe on ICE Dutch TTF is now trading just above $400 per 1000 cubic meters. US gas quotes on Henry Hub rose slightly and are near $2.3 mmBtu. Natural gas production in Canada could be reduced by 15% (by 2.5 billion cubic feet per day) due to fires in the province of Alberta.