Asia open: Investors brace for a white knuckle event

Stephen Innes SPI Asset Management

As a new week unfolds, investors grapple with a pivotal question: Will March inflation data provide a boost or a setback to the recently rejuvenated stock rally?

Monday's market activity didn't provide clear signals about investors' sentiment. Stocks ended the day with little change, while Treasury yields surged to their highest levels this year.

The upbeat sentiment stemming from Friday's jobs report, where indexes surged following wage-growth data suggesting contained inflationary pressures, has set the stage for a white knuckle event as the forthcoming consumer-price index release looms larger than life. Indeed, this upcoming release is arguably the most critical economic print of the year,

Investors eagerly await this report in hopes that it will offer more insights into the Federal Reserve's potential timeline for rate cuts and the frequency of such cuts. The big problem hiding in plain sight is that a larger segment of the investment community is even considering the prospect of no rate cuts this year, adding further uncertainty to the market outlook.

Author

Stephen Innes

SPI Asset Management

With more than 25 years of experience, Stephen has a deep-seated knowledge of G10 and Asian currency markets as well as precious metal and oil markets.

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Fed vs BoJ: Both hiked. The market only believes one of them – and the chart shows which

The Fed and the BoJ have just done something remarkably similar. Both central banks raised interest rates by 25 bps last week, both are confronting inflation risks, and both signal that future decisions will depend on incoming economic data.