Markets optimistic after strong US GDP number

How is this reaction explained by the media? Well, strong data suggests that the FED is doing a great job in combating inflation without killing the economy. If they are doing a great job, it means that this hawkish stance should continue for longer and this is why USD gained. OK, but the hawkish stance is bad for indices and they climbed higher. Well, it is explained in the other way: good GDP data means that the risk of recession is fading away, which means: buy stocks then. Sometimes it gets really funny when all moves have to be perfectly explained and justified.

SP500 rose significantly yesterday climbing to new yearly highs. With this, the breakout of the long-term down trendline seems currently confirmed, which seals the bullish deal here. Other indices are showing more hesitation but are slowly but surely moving higher.

The strongest currencies on Friday morning are the USD and JPY. We know why USD but why Yen? The reason may be found in the calendar, where we have the inflation data: Tokyo Core CPI, which came higher than expected (4.3% vs 4.2%). That means a rise in the quickest pace in….41 years.

On commodities, we finally got a correction on Gold, which was pretty expected considering how the recent bullish movement was stretched. Interesting things are happening on the Soft commodities, where Coffee rose almost 3%, continuing an impressive bounce, which started in the middle of the month. Almost all from the past 10 trading days on Coffee were bullish. Natural Gas made a new low yesterday but at the same time created a hammer candle on the daily chart. Today, the price is climbing slightly higher, which in combination with this hammer, can be a start of a new, mid-term bullish correction.
In today’s calendar, we have only Core PCE Price Index from the US and the earnings report from Chevron and American Express.