Wholesale Inventories Rise 0.1%, SP500 Remains Under Pressure

Key Insights

• Wholesale Inventories grew by 0.1% month-over-month. 
• U.S. dollar tested new highs as traders remained focused on the dynamics of Treasury markets. 
• S&P 500 continued its attempts to settle below the 4075 level. 

Wholesale Inventories Increased In February

On April 10, U.S. released Wholesale Inventories report for February. The report indicated that Wholesale Inventories increased by 0.1% month-over-month, compared to analyst consensus of +0.2%. Wholesale Inventories have started to recover after a 0.6% decline (revised from -0.3%) in January.

It remains to be seen whether the report will have a significant impact on market dynamics today as traders remain focused on the changes in Fed policy outlook.

The FedWatch Tool indicates that there is a 71.9% probability of a 25 bps rate hike at the next Fed meeting in May. The minor change in Wholesale Inventories should not change the market’s view on Fed policy.

Meanwhile, traders will remain focused on the dynamics of Treasury yields as the yield of 2-year Treasuries is trying to climb above the psychologically important 4.00% level.

U.S. Dollar Tests New Highs After Wholesale Inventories Report

U.S. Dollar Index made an attempt to settle above the 102.75 level after the release of the Wholesale Inventories report. The rebound in Treasury yields provided material support to the American currency in today’s trading session.

SP500 moved away from session lows, although it remains to be seen whether the rebound will be sustainable as higher yields may put material pressure on the yield-sensitive tech stocks.

Gold settled below the $2000 level as traders continued to take profits after the recent rally. The Wholesale Inventories report should not have a big impact on gold market dynamics as traders will likely remain focused on Treasury markets.

For a look at all of today’s economic events, check out our economic calendar.