CPI to guide markets

lmportant news this week:

• Wed, 11th, 14:30 CET US Core Consumer Prices Index.
• Wed, 11th, 15:45 CET CA BoC Rate Statement.
• Wed, 11th, 16:30 CET CA BoC Prs Conference.
• Thu, 12th, 14:15 CET EU ECB Interest Rate Decision.
• Thu, 12th, 14:30 CET US Core Producer Price Index.
• Thu, 12th, 14:45 CET EU ECB Press Conference.

CPI in focus as risk sentiment deteriorates

Today's CPI report will be the key event for financial markets, with traders looking for clues on the future path of US monetary policy. The US dollar continues to strengthen, reflecting expectations that inflation may remain sticky and that the Fed could keep rates unchanged for longer. A stronger-than-expected CPI reading would reinforce this view and could even revive discussions about additional tightening if inflation pressures prove persistent.

Risk sentiment remains negative across the board. AUDUSD is emerging as an important indicator, with the pair heading below last week's lows and signaling growing weakness in risk appetite. Equity markets are also under pressure, with the S&P 500 breaking lower yesterday and approaching the crucial 7,350 support zone. A sustained break below this level could trigger further downside and accelerate the current correction. In this environment, short-term rallies may increasingly be viewed as selling opportunities rather than the start of a new recovery phase.

Market talk

Markets remain firmly focused on inflation, interest rates, and risk management. Dollar strength continues to pressure equities, commodities, and higher-risk currencies, while traders position defensively ahead of today's CPI release. The combination of weaker equities, a falling AUDUSD, and strong dollar demand points toward a cautious market environment. Unless inflation surprises to the downside, risk assets may struggle to regain momentum in the near term.

Tendencies in the markets

Equities weaker, USD stronger, BTC weak, oil weaker, Silver weak, Gold weak.