Dow Jones Forecast: DJIA flat ahead of tomorrow's inflation data

US futures

Dow futures 0.09% at 38944

S&P futures 0.26% at 5220

Nasdaq futures 0.5% at 18189

In Europe

FTSE 0.5% at 7940

Dax -0.49% at 18321

Stocks are broadly flat for a second day
US CPI is forecast to rise to 3.4% YoY from 3.2%
Oil holds steady; API data is due later

US inflation data in focus

US stocks are pointing to a quiet open after a flatline finish on Monday in cautious trade ahead of tomorrow's inflation data.

Traders are sitting on the sidelines, with few prepared to take on big positions ahead of tomorrow's critical figures. This could provide further clues about the Fed's ability to cut rates in 2024.

Inflation is expected to tick higher in March to 3.4% YoY, up from 3.2% in February, highlighting the sticky nature of consumer prices at the start of this year.

Tomorrow's data comes as the market continues to weigh up the likelihood of a June rate cut. According to the CME Fed watch, the market is pricing at a 50/50 chance of the first rate cut coming in June. The market has also downwardly revised the scale of rate cuts expected this year to 65 basis points, down from 75 basis points just a few weeks earlier.

Amid a quiet economic calendar, attention is on Fed speakers today. During last week, several Fed speakers raised concerns over the Fed's ability to cut rates at all in 2024; this week, policymakers are more supportive of the Fed achieving three cuts before the end of the year.

Corporate news

BP ADRs are set to rise after the oil major upwardly revised upstream production for both oil and gas.

Coinbase is set to open lower as it continues to track volatility in the cryptocurrency market. Bitcoin trades down 1%.

Tilray, the cannabis growing firm, is set to plunge over 10% on the open after reporting a larger expected loss in its fiscal Q3 and after revenue also came in below expectations.

Dow Jones forecast – technical analysis.

After recovering from 38550, the April low, the Dow Jones is holding steady at around 39000. Buyers will look for a break out above 39284, the February high, to extend gains towards 40,000. Meanwhile, sellers will look for a break below 38550 to bring 38265, the February low, into focus.

FX markets – USD falls, EUR/USD rises

The USD is drifting lower in cautious trade ahead of tomorrow's inflation data and the minutes of the latest FOMC meeting. Investors are sitting on the sideline ahead of the date, which could impact the feds next to me.

EUR/USD is rising cautiously after the ECB bank lending survey showed that the picture was improving, but only very slowly. Demand for loans remains slow, suggesting that investment levels will remain weak as policy stays restrictive. That comes ahead of the ECB interest rate decision on Thursday when the central bank is expected to leave rates on hold at 4% and signal a cut in June.

GBP/USD is rising after encouraging retail sales data from the British Retail Consortium. Sales rose to an 8-month high after strong spending across Easter. Retail sales, which are not seasonally adjusted, rose 3.2% year on year in March, smashing forecasts of a 1.8% increase.

Oil steady ahead as a ceasefire looks unlikely for now

Oil prices are flat as hopes of a truce in the Middle East diminish.

Ceasefire talks between Israel and Hamas in Cairo appeared to be breaking down with no signs of an agreement. Comments from Israel's Prime Minister Benjamin Netanyahu regarding further attacks suggest that any deal is a long way off.

Without a ceasefire, the risk of Iran becoming more involved in the conflict remains high. Iran is OPEC's third-largest oil-producing nation, and their involvement in any war could impact supply. As a result, the risk premium on oil is rising again, which supports the higher long-term trend.

Meanwhile, the demand side remains upbeat after data yesterday showed that Indian demand was at a record high. Figures last week also showed that Chinese manufacturing activity returned to growth, supporting the demand outlook for oil.

API stockpile data is due shortly, and a larger-than-expected draw could help oil prices further.

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.

StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.

In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.

StoneX Financial Pte. Ltd. is not under any obligation to update this report.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit www.cityindex.com/en-sg/terms-and-policies for the complete Risk Disclosure Statement.

ALL TRADING INVOLVES RISKS. LOSSES CAN EXCEED DEPOSITS.

City Index is a trading name of StoneX Financial Pte. Ltd. (“SFP”) for the offering of dealing services in Contracts for Differences (“CFD”). SFP holds a Capital Markets Services Licence issued by the Monetary Authority of Singapore for Dealing in Exchange-Traded Derivatives Contracts, Over-the-Counter Derivatives Contracts, and Spot Foreign Exchange Contracts for the Purposes of Leveraged Foreign Exchange Trading. SFP is also both Derivatives Trading and Clearing member of the Singapore Exchange (“SGX”). SFP is a wholly-owned subsidiary of StoneX Group Inc.

The information provided herein is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to invest, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk.

The information does not represent an offer of, or solicitation for, a transaction in any investment product. Any views and opinions expressed may be changed without an update. To understand the risks and costs involved, please visit the section captioned “Important Information” and the “Risk Disclosure Statement”.

The information herein is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

StoneX Financial Pte. Ltd. 1 Raffles Place, #18-61, One Raffles Place Tower 2, Singapore 048616. Tel: 6309 1000. Co. Reg. No.: 201130598R.

This advertisement has not been reviewed by the Monetary Authority of Singapore.