Geoffrey Smith

Investing.com — To provide some indications that U.S. inflation has reached its peak, the U.S. government will issue April’s inflation numbers to the world. Stablecoin, Coinbase (NASDAQ) and Coinbase are both still struggling after an awful quarter of crypto trading. Although stocks are expected to open higher, investors should be reassured by the possibility of U.S. rate hikes of 75basis points. Walt Disney Reports from (NYSE:) after the bell. As Shanghai does not report any new Covid cases it is causing oil to rise, and the conflict in Ukraine causes Europe’s first ever disruption of gas flow. This is what you should know about financial markets Wednesday 11th May.

1. U.S. CPI data could show whether March marked the peak

The headline rate of U.S. inflation is expected to have eased in April, as last year’s surge in prices for used cars starts to pass out of the year-on-year calculations.

The consensus prediction of an 8.1% drop from 8.5% March will be confirmed by 8:30 AM ET (1230 GMT). This could provide some relief for bond and equity markets. But the most significant numbers are the month-on-30 rises. Core CPI is forecast to increase by 0.4% to 0.3%. Due to rising energy prices, the CPI is likely to see a sharp decline to 0.2% instead of 1.2%.

A battery of speeches from Federal Reserve officials on Tuesday suggested that the Fed isn’t currently minded to put 75 basis point rate hikes back on the table, although Cleveland’s Loretta Mester did warn that one should “never say never”.

Others pointed out the Fed’s already aggressive actions in the housing sector, something the Weekly Mortgage Application numbers due at 7AM ET should highlight.

2. TerraUSD crashes as rescue plan for TerraUSD fails to gain traction

The TerraUSD stablecoin and the Luna token languished overnight as a rescue plan launched by Do Kwon and other creators of the coin’s underlying blockchain failed to restore confidence in the assets.

The TerraUSD stablecoin traded at just above 49c by 6:30 AM ET two days after it was effectively broken from its dollar peg. However, it was still higher than the intraday low at 27c.

Kwon came up with some solutions to help restore the peg. Twitter (NYSE:)In the closing hours. He admitted that redemption pressures will likely continue to be strong for the immediate future.

Kwon and the Luna Foundation Guard – a group of crypto investors – have lent around $1.5 billion in the form of and dollars to the market-makers who usually keep the peg stable. However, it isn’t clear if that amount will be sufficient to cover the redemption demand.

TerraUSD, unlike and, which are the two largest stablecoin projects in existence, is only supported by an algorithm.

3. Stocks will open higher, but Toyota and Coinbase are disappointed; Disney is in the mix

The U.S. stock exchanges are expected to open higher, but in a holding trend ahead of CPI numbers. This is after Tuesday’s finding of a near-term bottom.

By 6:15 AM ET, were up 238 points, or 0.8%, while S&P 500 futures were up 0.9% and were up 1.1%.

Coinbase is likely to come under scrutiny. It fell 12.5% on Tuesday afternoon after receiving disappointing results. The comments by Gary Gensler, the SEC chief, accusing cryptocurrency exchanges of trading in favor of their customers is unlikely to improve sentiment towards the stock. Toyota (NASDAQ:) will also be under scrutiny after it was revealed that a number of Covid-related plants had been closed. Electronic Arts (NASDAQ 🙂 has performed well in the midst of tech weakness this quarter.

Early reporters Wednesday include Fiverr, Perrigo, Krispy Kreme and Wendy’s. Walt Disney receives top billing following the bell.

4. House approves $40 billion Ukraine deal

While the House of Representatives approved the $40 billion assistance package to Ukraine, it faces delay in Senate because of concerns over its lack of detail.

The package includes some $18.7 billion in military aid, equivalent to around a quarter of Russia’s entire defense budget last year.

The Ukraine’s flow of gas to Europe was affected when Naftogaz, the pipeline operator accused of illegally siphoning gas meant for other nations from the occupied areas of Ukraine. The European natural gas market saw a spike in prices, but it was quickly reversed. But, it remains unanswered how Russian gas will be replaced in the long-term.

Five Oil Rises as Covid Hope from Shanghai Signs of Covid are a Warning

After health officials in China announced that Shanghai did not have any new cases of Covid-19 Tuesday, crude oil prices rebounded. This marked an end to the two-month lockdown. Shanghai’s problems have radiated out into the economies of surrounding regions, triggering a sharp drop in Chinese oil demand in recent weeks.

Futures rose 3.3% to $103.06 per barrel by 6:30 ET. They were down 3.1% to $105.64.

At 10:30 am ET, the U.S. releases official inventories estimates. The American Petroleum Institute’s figures had shown an unexpected rise of 823,000 barrels in crude stockpiles, adding to evidence that record-high prices for gasoline and diesel and hurting demand.