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Inflation

AUD/USD slips to 2-week low ahead of CPIThe Australian dollar has plunged on Tuesday. AUD/USD is trading at 0.6632, down 0.95% on the day. The Aussie is under strong downward pressure, having lost around 1.7% since Thursday. Australia releases inflation on a quarterly basis, which magnifies the impact of the release. Inflation has been falling and this trend is expected to continue in the Wednesday release of first-quarter CPI. The headline figure is expected to fall from 7.8% to 6.9% y/y and from 1.9% to 1.3% q/q. The core rate, which is considered a more reliable gauge, is likewise expected to fall - from 6.9% to 6.7% y/y and from 1.7% to 1.4% q/q. Investors will be mindful that headline inflation surprised on the upside in Q4, rising from 7.3% to 7.8%. The two monthly inflation reports since the Q4 release in January, however, indicated that inflation was back on its way down, with headline CPI falling from 7.4% to 6.8% and beating expectations. The RBA would love to pause rates at 3.60% for a second straight month, and another drop in inflation would strongly support a pause at the May 2nd meeting. As well, another deceleration would be a strong indication that inflation has peaked, although the battle is far from over as it will take a long time to achieve the 2% target. The likelihood of another pause in rates stands at 83%, according to the RBA Rate Tracker. In the US, today's data has been a mixed bag. UoM Consumer Sentiment for April was expected to remain unchanged at 104.0, but surprised on the downside, falling to 101.3. There was better news from New Home Sales, which soared 9.6% in March, rebounding from -3.9% in February and crushing the estimate of 1.1%. There is resistance at 0.6751 and 0.6808 AUD/USD is testing support at 0.6657. Next, there is support at 0.6572
by OANDA
Inverted Yield Curve Starts in 2023 - Explained When the yield of the 3-month bond is higher than the 30-year bond yield, this is known as an inverted yield curve. It is a rare and unusual occurrence and we are seeing this today. This signals a potential economic recession in the future. An inverted yield curve suggests that investors have a pessimistic outlook for the future of the economy. They are willing to accept lower yields on long-term bonds because they anticipate a slowdown in economic growth. In contrast, they demand higher yields on short-term bonds because they expect the central bank to raise interest rates in response to inflationary pressures. An inverted yield curve can lead to a decrease in borrowing and lending activity, as it can make it more expensive for businesses and consumers to borrow money. This can result in a reduction in economic growth and can eventually lead to a recession. Some reference for traders: Micro Treasury Yields & Its Minimum Fluctuation Micro 2-Year Yield Futures Ticker: 2YY 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 5-Year Yield Futures Ticker: 5YY 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 10-Year Yield Futures Ticker: 10Y 0.001 Index points (1/10th basis point per annum) = $1.00 Micro 30-Year Yield Futures Ticker: 30Y 0.001 Index points (1/10th basis point per annum) = $1.00 Disclaimer: • What presented here is not a recommendation, please consult your licensed broker. • Our mission is to create lateral thinking skills for every investor and trader, knowing when to take a calculated risk with market uncertainty and a bolder risk when opportunity arises. CME Real-time Market Data help identify trading set-ups in real-time and express my market views. If you have futures in your trading portfolio, you can check out on CME Group data plans available that suit your trading needs www.tradingview.com
CBOT_MINI:30Y1!Long
by konhow
USD/JPY extends rally ahead of BOJ Core CPIThis week's data calendar out of Japan will be dominated by inflation releases and the Bank of Japan's two-day meeting at the end of the week. Traders will be keeping a close eye on BoJ Core CPI, which will be released on Tuesday. The index, which is the BoJ's preferred inflation gauge, fell from 3.1% to 2.7% in February. Another drop would support the central bank's view that inflation is falling back towards the 2% target. Inflation has been running above 3% and this has raised speculation that the BoJ will respond by tightening policy, which would likely send the yen sharply higher. The BoJ has insisted that it will not tighten until it is convinced that higher inflation is sustainable and not a result of more expensive goods and raw materials. The uncertain outlook for global growth and a weak domestic economy means that the BoJ is in no rush to shift policy. New Governor Ueda has been consistent in his message that he will maintain an ultra-loose policy, but nonetheless, speculation continues that the BoJ will tweak or even abandon its yield curve control, which has been criticised for distorting bond market pricing. I suspect that speculators hoping for a shift in policy that will send the yen higher will be disappointed after this week's meeting, as Ueda is unlikely to rock the boat at his first meeting. The BoJ will provide updated quarterly growth and inflation forecasts, which could provide a hint as to future monetary policy. USD/JPY is testing resistance at 1.3427. Next, there is resistance at 1.3499 133.41 and 1.3269 are providing support
by OANDA
Destablising Inflation Concerns Weigh on the GBP In March 2023, the United Kingdom's year-on-year consumer price inflation rate decreased to 10.1% from 10.4% in February. However, it exceeded the market forecast of 9.8%, and Britain remains the country in Western Europe with the highest rate of inflation. This also marks the seventh consecutive period where the rate has remained above 10% and has been above the Bank of England's 2% target for nearly two years. Consequently, policymakers will have to consider raising borrowing costs more than previously expected. Deutsche Bank has increased their projections for UK rates by anticipating two additional 25 basis point rate hikes from the Bank of England. Meanwhile, Morgan Stanley forecasts a single rate hike, but there is a possibility of a second one. British finance minister Jeremy Hunt said on Wednesday that "When inflation is above 10%, it is destabilising for the economy. It is not a good place to be, ultimately it is dangerous if you leave it there,". The seesawing in the GBP in reaction to this inflation data drop has perfectly encapsulated these projections for more rate hikes and fears for a destabilised economy. Still, the GBP/USD has been able to fend off a position below 1.24000 and is currently testing the fortitude of 1.24352 as a support. Upside potential could be limited by resistance at 1.24494 and 1.24738 considering that the market has likely already priced in a 25-basis-points hike at the Bank of England’s next meeting on May 11.
by BlackBull_Markets
GBP/USD edges higher as UK inflation higher than expectedUK inflation remains hot and stubbornly high. In March, headline CPI dropped to 10.1%, down from 10.4% but above the consensus estimate of 9.8%. Inflation is still stuck in double digits, but the silver lining is that inflation has resumed its downswing after unexpectedly rising in February from 10.4% to 10.1%. The core rate remained unchanged at 6.2%, above the estimate of 6.0%. The usual suspects were at play in the headline release, as food and energy costs continue to drive inflationary pressures. It hasn't been the best of weeks for the Bank of England. The employment report showed that wage growth remains high and inflation is galloping at a double-digit pace. The BoE has raised rates to 4.25%, but the battle against inflation has been difficult, and it's unclear if inflation has even peaked. The latest wage and inflation numbers have likely cemented another rate hike at the May meeting, but that's not good news for a struggling economy. GDP in February was flat, as widespread strikes and the cost-of-living crisis dampened economic activity. Consumers are struggling with higher taxes, hot inflation and rising interest rates. Inflation remains the central bank's number one priority and a pause in rates will isn't likely until the tight labour market, which is causing higher wage growth, cools down. In the US, there are no tier-1 events on the calendar. Investors will be focussing on Fedspeak, with Fed members Williams, Goolsbee and Mann making public statements. Earlier this week, Williams said that he expects inflation to continue falling and to reach 3.75% by the end of this year and hit the 2% target by 2025. GBP/USD is testing resistance at 1.2436. The next resistance line is 1.2526 There is support at 1.2325 and 1.2235
by OANDA
GBPJPY Technical Analysis 19.04.2023 1h chart– Previous Daily candle closed Bullish at 166.530 breaking above the previous Weekly High. – Buys on close above 166.900 targeting 30min Resistance formed on 16th December 2022 at 167.230, Leaving Runners to the Daily previous Support formed on 14th December 2022 at 167.660. – Sells on close below 166.450 targeting 4h Support at 166.240, Leaving Runners to the Daily Support formed at 165.930. – High Impact News data ahead for the Pound Sterling at Pre London for the CPI y/y forecasting 9.8% / Previously was 10.4%, High Volatility expected at the London Open.
by SalimFX20
GBP/USD - Pound rebounds as wage growth remains high, CPI expectThe UK employment report for March was a mixed bag. The number of unemployed persons jumped by 28,200, after a decline of 18,000 in February and higher than the estimate of -11,800. The unemployment rate nudged higher from 3.7% to 3.8%. These numbers, which point to a slight weakening in the labour market, were overshadowed by a jump in wage growth. Average earnings excluding bonuses hit 6.6% y/y in the three months through February, versus the revised upwards January read of 6.6% and the estimate of 6.2%. Wage growth remains stubbornly high, despite the Bank of England's steep tightening and that has to be a key concern for Bailey & Company. As wages continue to accelerate, the concern of a wages/price spiral remains very real and supports another rate hike at the May meeting. Inflation rose in February to 10.4%, up from 10.1%, and Wednesday's inflation report will be a crucial report card for the BoE. If inflation doesn't fall below 10% (the forecast stands at 9.8%), it's hard to see how the BoE can ease up on its relentless rate hikes. The wage growth numbers were enough for Goldman Sachs to upwardly revise its rate expectations for May from a hold to a 25 basis-point hike. The UK's uncertain economic landscape has become cloudier as hundreds of thousands of public sector workers are striking or planning to strike due to wage concerns. Workers have seen their real income fall as inflation has been at double-digit levels. The government has called for wage restraint in its battle to curb inflation, but strikers won't be in the mood to compromise as long as wages fail to keep pace with inflation. GBP/USD tested resistance at 1.2436 earlier in the day. The next resistance line is 1.2526 There is support at 1.2325 and 1.2235
by OANDA
Strong Banks / Point of inflection for the Markets Bank Earnings have been great! Though, The market wasn’t overly thrilled about it. We believe this is due in part to the uncertainty it caused regarding the fed rate path. The bank failure(s) that occurred, and fear of continued failures, cast doubt on the feds ability to continue to raise rates. This elevated markets, in our opinion, in conjunction with favorable inflation and NFP reports showing a cooling economy.… then the bank earnings arrived snd acted as a headwind to the indexes. What we think is important to watch for: 1) ES1! 4200 This region has been a repeated battleground for Price action. and a close above it .. or failure at it, would be a good indicator for midterm direction. 2) FED comments on the banks earnings Overall bullish on the market- but I do think we may range for a bit longer. 3) XLF may yield sustained alpha
CME_MINI:ES1!
by WillNixTrading
What Happens When the BoJ Kills its Yield Curve Control?Yield Curve Control (YCC) has kept interest rates on ten-year Japanese government bonds within a narrow range close to zero percent since 2016. The Bank of Japan (BOJ) employs YCC to target short-term interest rates at -0.1% and to maintain the 10-year government bond yield within 0.5% above or below zero. In 2016, Japan was grappling with over a decade of sluggish growth and the issue of deflation, where prices of goods decline. To avoid purchasing huge amounts of the bond market, Yield Curve Control (YCC) was introduced to maintain interest rates at their existing levels. But now, Japanese annual inflation has reached 3.3% as of February, which suggests that Yield Curve Control (YCC) may no longer be needed. The Bank of Japan (BoJ) has faced criticism for distorting markets with the YCC while inflation has exceeded its 2% target. As a result, the BoJ is considering phasing out YCC, which could have significant consequences for US and Japanese bonds and the USD/JPY exchange rate. So, what will happen when the Boj decides to Kill its YCC? Japanese investors have been disappointed for the past seven years in the returns on domestic bonds since interest rates have been fixed close to zero. This has prompted many to consider investing in US bonds which have become highly appealing, resulting in trillions of Yen being invested in them. A relaxation of the YCC by the Bank of Japan on the 10-year rate could potentially make Japanese government bonds more appealing to domestic investors. This could result in a significant amount of money repatriating to Japan and have a major impact on global markets. There are two potential outcomes if Japanese investors repatriate their funds and invest more in Japanese bonds. Firstly, the interest rates for US bonds may increase, leading to tighter financial conditions and a slowdown in US economic activity. Secondly, there may be a weakening of the US dollar, especially the USD/JPY, as investors sell their USD to buy JPY for repatriation. The USD/JPY is currently in the range bound between around 138.00 and 129.500. But a downside potential to a level like 116.00, which has not seen since early 2022 if a knee-jerk reaction eventuates. Ultimately, how drastic these outcomes turn out will depend on the selling pressure and timing of Japanese investors in reaction to a relaxation of the YCC. But how likely is it that the BoJ will loosen its control of the yield curve? Japan's new central bank Governor, Kazuo Ueda, has suggested that the policies of his dovish predecessor, Haruhiko Kuroda, will eventually be phased out. However, the BOJ is likely to avoid changing its policies until it is certain that inflation will reach and maintain its 2% target. Next week, On April 27-28, Ueda will preside over his first BOJ policy meeting, during which the board will release new quarterly growth and inflation forecasts that will be scrutinized for indications of how soon the central bank anticipates inflation will reach its target sustainably. Speaking last week, on April 10th, Ueda emphasized the need for the BOJ to make proactive decisions regarding the timing of policy normalization. He warned that delaying the adjustment could lead to disruptive consequences.
by BlackBull_Markets
DXY (Long) - Temporary bottom for the dollar The dollar has fallen significantly on the back of falling interest rates and the bank crisis Currently sitting at a crucial support going back several years My thesis is a temporary bounce up to the 50SMA on the weekly Bullish engulfing candle on the daily suggesting a temporary reversal The yields on bond have also slightly reversed, hitting a 50SMA on the weekly; yields and the dollar collerate This strategy could be also used for any of the USD pairs of your choice, whichever one shows the more strength relative to the dollar It is a short-term trade with very good risk/reward I would use the support line as a stop-loss Follow me for more analysis & Feel free to ask any questions you have, I am happy to help If you like my content, Please leave a like, comment or a donation , it motivates me to keep producing ideas, thank you :)
ICEUS:DX1!Long
by jurajholik
us10y 4-14-23gm, called the top on the us10y last year as well. (view post at the bottom of this thread). swinging by to actually adjust my public bias, after a few recent discoveries. --- jerome powell explicitly mentioned in a few of the recent talks that the fed is going to raise the interest rates above 5%, and keep them there for some time. what this tells me, is they're expecting inflation to tick back up - or they're taking the extra precautions to ensure that this indeed doesn't take place. --- what i am implying here in my count - is an extension to 5.9% (at the bare minimum). this could mark a top, unless we pull back in three waves (the same we did from the recent top). 👇
TVC:US10Y
by notoriousbids
2
GBP/USD - Another strong week for the British poundThe British pound is poised to post its fifth successive winning week. During this time, the GBP/USD has sparkled, rallying almost 500 points. This week's UK releases have not been as positive as the pound's upswing. GDP was flat in February on a monthly basis, down from 0.4% in January and unable to hit the estimate of 0.1%. Manufacturing Production was also flat and Industrial Production came in at -0.2%. Inflation remains in double digits, despite the Bank of England's aggressive rate policy, which has raised the benchmark cash rate to 4.25%. The combination of high inflation and rising interest rates has created a cost-of-living crisis and is weighing on businesses as well. To make things even worse, the country has been hit by widespread strikes in the public sector, as workers protest the drop in real income due to soaring inflation. An IMF forecast released this week indicated that the UK economy is projected to be the worst performer in the G20, which includes Russia. The economic situation isn't pretty, and the government and the BoE are under strong pressure to right the ship, and fast. Finance Minister Hunt has said he'll cut inflation in half and a recession can be avoided, but it's hard to share his optimism. This week pointed to further deceleration in inflation levels in the US. Headline CPI fell to 5.9%, down from 5.0%, although the core rate nudged up to 5.6%, up from 5.5%. The Producer Price Index declined to 2.7%, down sharply from 3.4%, and the core rate eased to 3.4%, down from 4.8%. Will the drop in inflation be accompanied by a decline in consumer spending? The markets are bracing for a soft retail sales report for March. Headline retail sales is expected to fall by 0.4% y/y and the core rate is projected to decline by 0.3% y/y.  A weak release could push the US dollar lower, as there will be more pressure on the Fed to consider pausing its rate hikes at the May meeting. GBP/USD touched resistance at 1.2537 earlier. The next resistance line is 1.2656 There is support at 1.2405 and 1.2282
by OANDA
Will we see a News Correction? 🙊 Inflation Data EU has been moving quite violently and was expected with inflation data. We took advantage of the momentum and took 4 buys as price left the 1.0922 key level. We originally took Sells from this level which played out nicely. However, just as we did last week, Price dips hard early in week. Then soars as the week progresses using news as a catalyst for a continuation of momentum. With new 4hr candle here, we may anticpate a top wick on the next 4hr candle. We may stretch to 1.103 daily/weekly wick fill today or tomorrow. That's short term target with this momentum. Most of the time the news corrects but also the market is very sensitive to cpi data . especially in recent months for obvious reasons. More Analysis: It is a good for bulls that the 4hr candle is closing above our daily Level at 1.09885. We also have clean traffic to the left hand side on the 4hr for bulls. For Bears we have the argument that we already have significant engulfing daily bullish candle. Additionally , fomo after some missed the entry from 1.0922 pre-news. Also 1.10 is a psycholigcal level for bulls and bears. So we may see some profit taking before heading any more north to Weekly wickfill at 1.103
Long
by ShrewdCatfx
2
AUD/USD - Australian dollar jumps on sizzling jobs reportAustralia posted a blowout employment report today, giving the Australian dollar a strong boost. The economy created 53,000 new jobs in March, after a downwardly revised 63,600 a month earlier. This crushed the estimate of 20,000 and especially impressed as full-time employment increased by 72,000 (part-time decreased by 19,200). Unemployment was unchanged at 3.5%, below the forecast of 3.6%. What can we expect from the RBA? The central bank paused in March for the first time in the current rate-tightening cycle and Governor Lowe made clear that another pause was data-dependent. The next meeting is on May 2nd and the odds of a pause have eased to 78%, compared to 94% before the employment release. Australia releases the March inflation report less than a week prior to the meeting, and if inflation is higher than expected, the RBA will have to consider a 25-basis point increase in order to cool down the job market and inflation. The recent bank crisis, which roiled the global financial markets, appears to have eased. Still, the extent of the fallout of the collapse of four US banks and Credit Suisse is not yet clear, and central banks need to give consideration to the crisis in mind as they determine their rate path. RBA Deputy Governor Bullock addressed this issue on Wednesday, saying the RBA had considered a pause well before the bank crisis, and the bank decided on the non-move in order to protect job gains and to take into account lags in rate policy. Bullock maintained that there were no signs that the bank crisis had caused a tightening in financial conditions in Australia. There is resistance at 0.6897 and 0.6791 AUD/USD tested support below 0.6700 earlier today. The next support level is 0.6608
by OANDA
DXY Potential Forecast | Post CPI | 13th April 2023Fundamental Backdrop 1. CPI m/m printed 0.1% compared to forecasted at 0.2% 2. Fed hikes effects really slowing inflation down 3. USD fell shorting after, signifying the slowing down of inflation at a faster pace than what the market has been pricing in. Technical Confluences 1. Price rejected off resistance at 102.8. 2. Price looks good to form a new higher timeframe low and continue its bearish trajectory. 3. There has not been a strong confluence for any longs on the DXY thus far. Idea We are looking for price to continue its bearish trajectory till 101.67 and the probability of it forming a new low is now high. NOT FINANCIAL ADVICE DISCLAIMER The trading related ideas posted by OlympusLabs are for educational and informational purposes only and should not be considered as financial advice. Trading in financial markets involves a high degree of risk, and individuals should carefully consider their investment objectives, financial situation, and risk tolerance before making any trading decisions based on our ideas. We are not a licensed financial advisor or professional, and the information we are providing is based on our personal experience and research. We make no guarantees or promises regarding the accuracy, completeness, or reliability of the information provided, and users should do their own research and analysis before making any trades. Users should be aware that trading involves significant risk, and there is no guarantee of profit. Any trading strategy may result in losses, and individuals should be prepared to accept those risks. OlympusLabs and its affiliates are not responsible for any losses or damages that may result from the use of our trading related ideas or the information provided on our platform. Users should seek the advice of a licensed financial advisor or professional if they have any doubts or concerns about their investment strategies.
TVC:DXYShort
by OlympusLab
DXY Outlook 13 April 2023The DXY broke down from the 102 support level (now turned resistance) following the release of the US CPI data overnight. CPI y/y was released at 5% which indicated a consistent slowdown in inflation growth for the US, leading to increasing market expectation that the Federal Reserve is likely to pause on further interest rate hikes (hence the significant move lower on the DXY. Currently trading at the 101.50 price level, the DXY is likely to consolidate along this price level before continuing with the downtrend toward the next key support level of 100.85. However, watchout for a brief bounce on the DXY, with the 23.6% fib retracement at the 101.77 price level providing possible interim resistance.
TVC:DXYShort
by JinDao_Tai
1
BLDR (Long) - lovely chart, lovely fundamentalsFundamentals Builders FirstSource is in a robust financial situation and very cheaply valued (P/E = 4.6, P/S = 0.6) Since the start of 2011, its revenue has tripled and earnings grew by almost 900%! Even last year when the market was puking, its earning grew by 60% Their profitability is also good with ROE = 55.4% (Industry = 17.9%) and net profit margins at 12.5% The stock is very much tied to the housing sector (which is also the main caveat), so if the housing market were to absolutely fall off the cliff (which is not completely unlikely), the stock would suffer. However, estimates already show BLDR's earnings falling in the next two years (meaning they have already been priced) and the stock is still rising, suggesting a lot of internal strength Additionally, the managers announced a share buyback program and we might see them buying 10% of the public shares by the end of 2023, which would serve as a strong tailwind for the stock price However, be mindful of the housing market (I suggest watching the chart of house builders - ticker: XHB) Technicals Technicals look like from a textbook On a weekly we can see a massive rounding base , suggesting a long-term accumulation; the break was not the cleanest, but the price action of the last few days suggest a follow-through in price Relative strength to the overall industry is also pretty impressive and the stock clearly outperforms the rest of its industry Trade The stock has gone a bit further from the breakout point , but it pulled back today and it is yet not too far as for it to be unprofitable to enter As a stop-loss , I would use the most recent low on a daily The stock seems very suitable for a short-term trade as well as a longer term investment As i mentioned before, be mindful of the housing market and commodity prices (lumber, copper etc.). The stock is correlated to both Follow me for more analysis & Feel free to ask any questions you have, I am happy to help If you like my content, Please leave a like, comment or a donation , it motivates me to keep producing ideas, thank you :)
NYSE:BLDRLong
by jurajholik
1