Giles Coghlan LLB, Lth, MA
Financial Source
The US CPI print on Wednesday at 13:30 UK time sits in a light calendar week for US data. The CPI print is likely to draw significant attention tomorrow to see how the US is doing in its fight against inflation.
Headline inflation is expected to fall again
Over the last year, headline inflation has been consistently falling in the US month over month. Today’s print is expected to show another drop with expectations of a 3.1% print which is down from the 4% prior.
The core inflation print has remained stickier in the US, as it has throughout many other major Western economies. The current reading is 5.3% and that is expected to fall lower to 5%.
-638247456940374363.png)
What’s likely to move markets
The financial source team has a handy economic data tracker tool that shows the minimum and maximum expectations for the data print. This is helpful in assessing which data releases are needed to surprise markets.
For the headline reading, a print below 2.9% and a core reading below 4.9% will both be below the minimum expected from the economists surveyed. In the case of a low print, investors will be carefully watching gold for potential gains. However, be aware that a lower CPI print has been expected all week, so a ‘buy the rumour, sell the fact response’ is also possible.
If the reading comes in above market expectations with a headline reading above 3.3% and a core reading above 5.1% then the USD could find strength again along with yields which would be a natural headwind for silver and gold. Note how gold is around a key daily trend line right now, and traders will likely use this as a reference point for risk. See it marked on the gold chart below.
-638247457258182815.png)
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended Content
Editors’ Picks
EUR/USD grinds higher toward 1.0900, Fedspeak eyed
EUR/USD is edging higher toward 1.0900 early Monday, helped by a better market mood. The pair also draws support from softer US Dollar and US Treasury bond yields, awaiting Fedspeak amid light European trading.
Gold price rises to a new record high, escalating geopolitical tensions in focus
Gold price gains momentum on Monday. The yellow metal hit a record high near $2,441 during the Asian session on Monday amid renewed hopes for interest rate cuts from the US Federal Reserve and rising geopolitical tensions in the Middle East.
GBP/USD advances to near 1.2700 due to rising expectations for Fed rate cuts in 2024
GBP/USD extends its gains for the second consecutive session, trading around 1.2710 during the Asian hours on Monday. A weaker US Dollar supports the pair. The Pound Sterling may face a challenge as the BoE is expected to deliver 60 basis points rate cuts in 2024.
Week Ahead: Ethereum and DeFi to come under spotlight this week Premium
Bitcoin’s attempt at a comeback has stirred the pot, causing altcoins to become volatile again. With the US Securities and Exchange Commission set to make its decision on Ethereum ETFs this week, some sectors of altcoins might see higher liquidity and volatility than others.
Will they/won’t they cut rates as commodity prices in focus
What a difference a couple of days make. One day stock markets are making record highs and banking on rate cuts, the next stocks are giving back gains and rate cut expectations are being pared back.