Extracts from IG markets daily newsletter about sums it up:"US...

Extracts from IG markets daily newsletter about sums it up:

"US Stocks US equity markets roared, and US yields tumbled 8-10bp across the curve following the release of cooler inflation and retail sales data, boosting expectation of Fed rate cuts. Headline CPI rose 0.3% Mom in April for an annual rate of 3.4%. Core inflation fell to 3.6% from 3.8% prior to its lowest level in three years. Following this week's CPI and PPI release, the Fed's preferred measure of inflation, Core PCE inflation, is expected to ease to 2.7% YoY from 2.8%. "

"What do the Charts Say? Well, as we suggested at the start of the week, the fortunes of the Nasdaq and US equity markets, in general, would be determined by last night's inflation report. The break above the 18,464 March high has negated the view that the correction was missing a final leg lower and will likely see the uptrend extend in the coming sessions, towards 19,000. An indication that the rally has run its course would be a break back below the 17,750, the same level we leaned against in March and April."

"ASX200; We remain of the view that the pullback from the 7910 high is missing another leg lower (Wave C) towards 7390ish to complete a three-wave ABC Elliott Wave correction. However, if the ASX200 were to break and close above last Wednesday's 7814 high, we would move to the sidelines to reassess. ASX futures closed 50 points higher this morning at 7842 (+0.64%), which should see the ASX200 cash open higher this morning at 7804ish. "

"Gold closed higher overnight at $2386 (+0.93%), supported by the overnight decline in US yields and the US dollar that followed last night's CPI data. As we have noted, the rally from the $2290/70 support zone appears constructive, and with the CPI release out of the way, we expect a retest of the all-time $2431 high."