Forexlive Americas FX news wrap 13 May: Oh No Roaring Kitty returns and dominates chatter

• US stocks end the session mixed. Nasdaq higher. Dow lower. S&P near unchanged
• Crude oil futures settle at $79.12
• SNB chairman: The fight against inflation is far advanced
• Treasury Secretary Yellen: We value our trade and investment relationship with China, BUT.
• BOA Monihan: Sees a slow growth but still positive spending in the US
• European indices closing mixed with Spain and Italy rising
• Roaring Kitty posts again….”Fine…I will do it myself”
• New York Fed inflation expectations for 1-year rises to 3.3% from 3.0%
• Treasury Secretary Yellen: Bidens #1 priority is to bring down inflation
• Reuters poll: Federal Reserve to cut fed funds rate by 25 basis points in September
• Fed Gov. Jefferson: Economy has made a lot of progress, inflation has retreated
• AP: Chinese regulators tell tech firms in China to buy fewer Nvidia chips
• Kickstart the FX trading day on May 13 w/a technical look at the EURUSD, USDJPY and GBPUSD
• Why rent in the CPI report is so hard to figure out
• Canada March building permits -11.7% vs -3.3% expected
• The AUD is the strongest and the JPY is the weakest as the NA session begins
• ForexLive European FX news wrap: The calm before the storm

As the NY session comes to a close to start the new trading week, the markets were highlighted by the first tweets in 3 years from the king of meme Roaring Kitty. His tweets sent shares of Gamestop up 74.40% to $30.45 (from $17.46 close on Friday). Shares of AMC also rose sharply with a gain of 78.35%. Overall, he posted 12 tweets (did he overdue it) which were filled with hints to what will no doubt lead to a maze of specultation. Already someone who bought a number of $25 call options for expiration on the 17th of May for $0.21 ($27K in total), had marked to market gains of $2M (“I am a big GameStop shopper”).

In other news:

• The New York Fed’s May inflation expectations indicate a mixed yet cautiously optimistic outlook. Consumer expectations for one-year inflation rose to 3.3% from 3.0%, while the three-year outlook has modestly decreased to 2.8% from 2.9%. Interestingly, the five-year inflation expectation also rose to 2.8% from 2.6%, suggesting some long-term stability concerns. Additionally, while consumer confidence in job retention has improved, optimism about finding new employment has declined. Expectations for increases in home prices and commodities are on the rise, contrasting with a slight decline in expected earnings growth to 2.7%, although this remains above pre-pandemic levels. These trends, coupled with Michingan 1-year inflation rise from last week, may be a cause of concern for the Fed. Not only is inflation still north of 3% in the short term at least, it is also moving higher (which is not good).

In Fedspeak today, both Fed Gov. Jefferson and Cleveland Fed Pres. Mester both spoke. Mester is counting down the days until she retires in June. As a result, she did not have anything to say from an economic/policy standpoint.

• On the other hand, Fed Governor Jefferson (and voting member) discussed the current state of the U.S. economy, acknowledging significant progress, particularly in terms of inflation reduction and labor market resilience. He described the economy as being in a solid position, though he noted a slowdown in the rate of inflation decline and identified inflation as a continued area of concern. Given the overall economic strength, Jefferson emphasized the need for a focus on inflation, advocating for the maintenance of a restrictive policy rate. He stressed the importance of seeking further evidence that inflation is subsiding before considering changes to the policy rate, suggesting that it should remain restrictive until there is clear indication that inflation is abating. Of 9 headlines, Jefferson mentioned concerns about inflation in 6 of the 9. Clearly, he is in no hurry to cut rates soon.
• In other central bank news, SNBs Chairman Thomas Jordan expressed that the battle against inflation is nearing completion. However, he emphasized the persistence of uncertainty and the necessity for continued vigilance. The outlook for Swiss inflation has notably improved, suggesting a more stable economic environment moving forward. Although the SNB has already implemented rate cuts, the chairman’s comments suggest that further rate adjustments may be anticipated to ensure the stability of inflation rates.

US stocks closed mixed:

• Dow industrial average,-0.21%
• S&P index -0.02%
• NASDAQ index +0.29%
• Small-cap Russell 2000, +0.11%

Looking at the US debt market:

• 2-year yield 4.867%, unchanged
• 5-year yield 4.509%, -0.9 basis points
• 10 year yield 4.490%, -1.4 basis points
• 30-year yield 4.631%, -1.4 basis points

Crude oil traded higher today and closed above its 100 day MA in the process. The price is trading at $79.12. The 100 day MA is at $78.38.

Bicoin is trading steady at $63,050.

This article was written by Greg Michalowski at www.forexlive.com.