Wake Up Wall Street (SPY) (QQQ): CPI crushes bulls' hopes, fed funds futures set up 50bps March rise

Here is what you need to know on Friday, February 11:

Ivan Brian FXStreet

Another shocking CPI print leads to yet more repricing in the bond markets and even more hawkish predictions for the next Fed meeting. At one stage yesterday, we were nailed on for a 50bps rate rise in March, according to the Fed funds futures contract. Currently, this is indicating about an 80% probability of a 50bps rate hike at the March meeting. The Fed is increasingly paying for its "transitory" moniker throughout much of 2021. Many predicted this would come to pass, but the speed of change in 2022 has been surprising. One month ago the probability of a 50bps rate rise stood at less than 5%.

All this will likely see growth and tech once again suffer, and value looks to be the place to be. Oil prices are elevated but may also come under pressure if more economic indicators deteriorate. This is holding energy stocks up, but if the yield curve keeps flattening, then oil will have to give way.

The dollar is back to more or less where it started before yesterday's CPI, at 1.1414 versus the euro. The initial dollar spike strength on the CPI number gave way to parity as yields in Europe also followed US yields higher. Oil is at $91.17, and gold is trading at $1,830. Bitcoin is slightly higher at $43,700.

See forex today

Wall Street News (SPY) (QQQ)

Under Armour (UAA) down on warning of supply chain issues.

Upwork (UPWK) down on earnings.

Cleveland Cliffs (CLF) down 6% on earnings miss.

Phillip Morris (PM): Bank of America reiterates buy rating.

Newell Brands (NWL) up 1% on revenue beat.

Expedia (EXPE) up 5% premarket on strong earnings.

Aurora (ACB) down 5% despite beat on earnings.

Yelp (YELP) up 5% premarket on earnings.

Affirm (AFRM) down 10.5% premarket after earnings.

Zillow (Z) up 12% on earnings.

HubSpot (HUBS) up 11% on earnings.

Cloudflare (NET) up 5% on earnings.

Upgrades and Downgrades

Source: Benzinga Pro

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Author

Ivan Brian

FXStreet

Ivan Brian started his career with AIB Bank in corporate finance and then worked for seven years at Baxter. He started as a macro analyst before becoming Head of Research and then CFO.

EUR/USD deflates to fresh lows, targets 1.1600

The selling pressure on EUR/USD now gathers extra pace, prompting the pair to hit fresh multi-week lows in the 1.1625-1.1620 band on Friday. The continuation of the downward bias comes in response to further gains in the US Dollar as market participants continue to assess the mixed release of US Nonfarm Payrolls in December.

GBP/USD breaks below 1.3400, challenges the 200-day SMA

GBP/USD remains under heavy fire and retreats for the fourth consecutive day on Friday. Indeed, Cable suffers the strong performance of the Greenback, intensified post-mixed NFP, and trades at shouting distance from its critical 200-day SMA near 1.3380.

Gold flirts with yearly tops around $4,500

Gold keeps its positive bias on Friday, adding to Thursday’s advance and challenging yearly highs in the $4,500 region per troy ounce. The risk-off sentiment favours the yellow metal despite the firmer tone in the Greenback and rising US Treasury yields.