Markets will be closely watching the release of US inflation data today, which is expected to show a fall from 3.4% to 2.9%.
- There will be a release of US CPI (inflation) data today, which is expected to fall from an annualized rate of 3.4% to 2.9%. If the number is lower, it is likely to boost stocks and lower the Dollar; if higher, to sink stocks and boost the Dollar. The monthly CPI is expected to fall from 0.3% to 0.2%, with core CPI expected unchanged at 0.3%. The data will be closely watched as an indicator of the probability of a first Fed rate cut at its meeting in May. A cut in March seems unrealistic unless the data shows an unfeasibly strong drop in CPI.
- US stock markets fell yesterday after initially reaching new record highs after the open. This happened in all the major equity indices, the S&P 500 and the NASDAQ 100 and the Dow Jones 30. Trend traders will want to be involved on the long side, and day traders may consider trading these indices long if they show bullish momentum after the market opens. The S&P 500 remains above the key round number of 5000.
- Cocoa futures fell a bit yesterday after reaching a new multi-year high the previous day. Trend traders will remain interested in this commodity on the long side. It has been exhibiting a powerful bullish trend for well over one year. Cocoa futures are up by more than 25% since the start of 2024.
- Bitcoin has finally made a bullish breakout beyond the key resistance level at $48,675 and is now testing the big round number at $50k. I think bulls will be wise to wait until a daily close above the big round number at $50,000 before entering any new long trade here.
- In the Forex market, the Euro has been the strongest major currency since the Tokyo open today. The New Zealand Dollar has been the weakest. The highest volatility recently has been seen in the USD/JPY currency pair, and in Yen crosses, although this is starting to decline. The US Dollar is moving little, as it consolidates ahead of today release of key US CPI (inflation) data.
- There will be a release of Swiss inflation data today, which is expected to show a sharp month-on-month increase from 0.0% to 0.6%.
- UK Claimant Count Change (unemployment claims) data released a few minutes ago showed that the UK Unemployment Rate fell unexpectedly strongly, from 4.2% to 3.8%. This has boosted the Pound at it has hawkish implications for rates, as it suggests the economy may not be cooling as much as thought.
- Bank of England Governor Bailey stated a few hours ago he would not put too much weight on whether the UK enters a technical recession, as may be seen when UK GDP data is released Thursday, which is expected to show month-on-month GDP decline by 0.3%.
