Dollar steady ahead of US CPI, Fed

National Australia Bank

In Australia, National Australia Bank (NAB) business confidence fell to its lowest in six months. The index fell to -3 in May from an upwardly revised 2 in April, turning negative for the first time since November last year. Sentiment worsened in manufacturing, transport, and construction.

UK unemployment rate

In the UK, the unemployment rate unexpectedly rose to 4.4% in April. Economists had anticipated it to remain at 4.3%.

FOMC

The Federal Open Market Committee (FOMC) two-day meeting will start later on Tuesday. No change is expected this time. Fed funds rates should remain in the current range of 5.25% to 5.5%. But the market will be looking for any indication of when the Fed will start cutting rates. According to the Chicago Mercantile Exchange (CME) FedWatch tool, there is only a 10% probability of a cut at the July 31 meeting. It goes up to a 47% chance of a cut at the September 18 meeting and 61% in November.

The dollar

Hours before the conclusion of the Fed meeting, the USD will be tested by inflation data. The May consumer price index is expected to rise by 0.2% month-on-month (MoM) and 3.4% YoY. Core consumer price index (CPI) expectations: 0.3% MoM, 3.5% year-on-year (YoY).

Tech giants

Wall Street was left unimpressed by Apple's presentation on Monday. The tech giant unveiled its long-awaited AI strategy, integrating its new "Apple Intelligence" technology across its suite of apps and adding ChatGPT to its devices. A two-hour-long presentation to tell us Siri would be able to interact with messages, calendar, write emails, change the tone of voice, etc. Apple executives also gave details on data safety. Investors were waiting for more, especially some reassurance that Apple was in a good position to compete on AI with Microsof.

Tesla

Meanwhile, Tesla CEO Elon Musk said he would ban Apple from his companies if the iPhone maker integrated OpenAI at the operating system level. Telling the markets that it would be an unacceptable security violation.

Oracle

Oracle is due to report its earnings for the fourth quarter on Tuesday evening. The street anticipates earnings of $1.65 per share on revenue of $14.6 billion. Three months ago, Oracle stock rose sharply as the company reported an acceleration of its earnings and revenue growth. Not that these results were mostly in line with expectations. This quarter again, investors will be attentive to the group's cloud services and license support segments. Last quarter, its revenue rose by 12% to nearly $10 billion, benefiting from strong demand for its artificial intelligence servers.