A significantly softer than expected PPI print confirming Wednesdays CPI saw the green light for risk on in Thursday’s session and saw a broad rally in risk assets. All major US indexes rallied strongly with the Tech heavy NASDAQ outperforming while the S&P 500 closing at its highest level since February.

The March producer price index, which is a measure of prices paid by companies and often a leading indicator of consumer inflation, declined by 0.5% month over month against an expectation that it would remain flat, coupled with a weaker than expected employment figure, with unemployment claims rising by 239k vs an expected 233k saw the risk on trade also boom in Forex Markets.

FX Markets

Risk sensitive AUD and NZD were the G10 outperformers both seeing gains of around 1.5% against the USD with NZDUSD poking above 0.63 and the AUDUSD just stopping short of regaining 0.68 and testing the resistance levels set earlier in the month.

CHF, EUR, and JPY all saw gains against the USD to varying degrees, the USDCHF led the charge , pushing through  0.8900 to the downside to hit its  lowest since January 2021 of 0.8860.

EURUSD printed a 1yr high of 1.1067 rallying on Dollar weakness and helped by ECB speak with members noting the persistence of high core inflation and stating the ECB has further to go in tightening monetary policy.

USDJPY dropped further into its range before The Yen ran out of momentum just shy of the key psychological 132.00 level.

GBP was the underperformer, GBPUSD still rallied on the session though largely due to broad USD weakness, seemingly hampered by comments from BoE’s Pill who noted indicators of momentum in wage growth appears to be easing.

Commodities

Gold broke out again on Dollar weakness and falling yields, with XAUUSD hitting 12-month highs and its 4th highest price print in history, stopping just short of 2049 USD an ounce. XUUSD seeming to continue its march towards all-time highs that were set back in August 2020

Crude Oil declined on the day, retracing some of yesterdays gains, but still holding above the resistance level at the top of its previous range which could now act as support.

In Fridays economic calendar, some more risk events out of the US with Retail Sales and Consumer Sentiment released