Headline and Core CPI both rose 0.2% in February as expected.
This should help to calm nerves following an unexpected jump in consumer prices in January
At the beginning of February US stock indices experienced their largest and most protracted sell-off since early 2016 after a jump in Average Hourly Earnings triggered inflationary fears which led to a spike in bond yields and volatility. This was compounded a fortnight later by an unexpected surge in CPI when the headline number rose 0.5% in January – well above the +0.1% rise from the previous month.
Today’s data should help to take the pressure off equities and bonds – for the time being at least. Consequently, we shouldn’t be surprised to see US Treasury yields pull back and the major US stock indices continue their ascent, at least until we hear what the Fed’s FOMC has to say at next week’s meeting.
Financial spread trading comes with a high risk of losing money rapidly due to leverage. You should consider whether you can afford to take the high risk of losing your money.
Recommended Content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.