All articles tagged with #cpi data
Mortgage rates retraced to three-week lows after July's CPI print came in line with expectations, with the bond market absorbing the data and leaving little surprise, while the 30-year fixed rate sits around 6.74% (down 0.05) as traders await further inflation signals.
Bond traders are uncertain about a September Fed rate cut due to recent strong jobs data and upcoming inflation reports, especially CPI figures, which will influence expectations and bond yields. The market remains in a state of limbo amid tariff uncertainties and mixed signals from policymakers, with some analysts expecting no rate cut in September and others seeing potential for easing later in the year.
U.S. stock futures showed slight gains as investors processed recent CPI data, which indicated a rise in annual inflation to 2.6% in October. Despite this, analysts like Jeremy Schwartz suggest inflation may be lower than reported, with expectations for a potential Fed rate cut increasing. While most sectors on the S&P 500 saw gains, tech stocks lagged. Investors are also focused on upcoming speeches by Federal Reserve officials, including Chair Jerome Powell, and earnings reports from major companies like Disney and Applied Materials.
Traders have increased the probability of a Federal Reserve interest rate cut in December to 80% following in-line CPI data, which showed a slight acceleration in inflation. The Fed is expected to cut rates by 25 basis points, with further easing anticipated in 2025. Investors are advised to consider quality fixed income and diversified strategies, as well as US equities, amid solid economic growth and robust AI investment.
Wall Street analysts at Citi, UBS, and Goldman Sachs do not anticipate the Federal Reserve cutting rates in June following the release of stronger-than-expected CPI data and the FOMC minutes. Citi believes the case for preemptive cuts is more difficult due to the lack of increased confidence in inflation trends, while UBS has removed the June rate cut from its base case and now looks for the first cut in September. Goldman Sachs has pushed back its forecast of the first rate cut from June to July, expecting cuts at a quarterly pace thereafter.
The yields on 2- and 10-year Treasury bonds saw their largest one-day jumps since March 4 ahead of the release of February's consumer-price index (CPI) data. Analysts expect a 0.4% gain in consumer prices, and if the report shows higher inflation, it could delay the anticipated timing of the first interest-rate cut from the Federal Reserve. The inflation data will be crucial for informing the Federal Open Market Committee's meeting and their forecasts.
US stock index futures fell as the technology sector experienced profit-taking, with focus shifting to upcoming inflation data and concerns over the path of US interest rates. Wall Street indexes pulled back from record highs, and investors are awaiting CPI data for cues on the economy and potential rate cuts. The recent mixed employment report and comments from Federal Reserve officials have contributed to market caution, leading to questions about the sustainability of the Wall Street rally, particularly in the technology sector.
The US dollar's post-CPI rally is facing challenges as 10-year Treasury yields decline, prompting questions about the currency's upward momentum. Major currency pairs like EUR/USD and USD/JPY are testing key levels, while USD/CAD is retreating from a breakout. Gold has dipped below $2,000 but is finding support at the 100-day moving average. The dollar's next move hinges on bond market developments, with falling yields potentially providing a boost to risk trades.
Stocks closed higher on Monday as investors await the release of the Consumer Price Index (CPI) data and the Federal Reserve's interest rate decision. The Dow Jones Industrial Average and S&P 500 reached their highest levels since January and March 2022, respectively, while the Nasdaq Composite closed at its highest level since April 2022. The focus is now on the CPI data, which is expected to show a slight deceleration in inflation. In individual corporate news, Macy's shares surged after receiving a $5.8 billion buyout offer, and Coinbase stock declined as bitcoin prices fell. JPMorgan warned of a potential "catch-22 situation" for US markets in 2024, and Microsoft reached a tentative agreement on AI provisions in union contract negotiations.
Bitcoin, Ethereum, and Dogecoin experienced a decline in value despite positive inflation data in the Consumer Price Index (CPI) report for June. The U.S. consumer prices rose by 0.2% in June, lower than expected, and core inflation came in at 4.8%. However, analysts foresee a deeper decline for Bitcoin, with concerns about a potential downward correction and a loss of momentum. On-chain analytics firm Santiment noted that both sharks and whales are accumulating stablecoins, indicating a higher probability of significant cryptocurrency purchases in the near future.
Dow futures were trading mixed as investors awaited key inflation data and second-quarter earnings. This week, market participants will closely monitor the consumer price indexes, Michigan consumer sentiment, and speeches from FOMC and Federal Reserve officials. Earnings season is set to kick off with companies like Bed Bath & Beyond, PepsiCo, Delta Air Lines, and UnitedHealth Group reporting quarterly results. Last week, the Dow declined 1.9%, the S&P 500 lost 1.2%, and the NASDAQ dipped 1%.
The stock market reacted positively to the latest CPI data, with metal and mining stocks rallying on China's stimulus measures. Attention is now turning to the Federal Reserve's upcoming policy meeting, with investors eagerly awaiting any signals on the central bank's plans for tapering its bond-buying program.
The post-NFP defensiveness remains intact for bonds, and tomorrow's CPI data will decide whether bonds fully erase last week's gains or if yields can revisit the stronger levels. The KRE regional bank ETF shows zero healing, even as the broader stock market has fully erased all of the weakness, indicating a banking sector crisis. Banks will begin reporting earnings at the end of the week, which may bring a change in this paralysis.