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$CNIRYY (August/2024)- China's annual inflation rate edged up to 0.6% in August 2024 from 0.5% in July, falling short of market forecasts of 0.7%. Still, it was the highest print since February, marking the 7th straight month of consumer inflation amid supply issues due to flaming heat and pouring rains. Food prices rose for the first time since June 2023, with their rate of increase the fastest in 19 months (2.8% vs flat reading in July) as fresh vegetables rebounded sharply. Meanwhile, non-food prices increased 0.2% yoy, much slower than the prior 0.7%, on softer rises in cost of clothing (1.4% vs 1.5%), housing (flat reading vs 0.1%), health (1.3% vs 1.4%), and education (1.3% vs 1.7%). At the same time, transport costs fell at a steeper rate (-2.7% vs -0.6%), with lower oil prices offsetting higher cost of utilities. Core consumer prices, deducting food and energy costs, increased 0.3% yoy, the least since March 2021. Monthly, the CPI rose 0.4%, the second month of gain but lower than consensus of 0.5%. source: National Bureau of Statistics of China
ECONOMICS:CNIRYY
by Mr_J__fx
$JPIRYY -Japan Inflation Rate YoYECONOMICS:JPIRYY (March/2024) The annual inflation rate in Japan ticked lower to 2.7% in March 2024 from February's 3-month peak of 2.8%, matching market consensus. There were slowdowns in prices of transport (2.9% vs 3.0% in February), clothes (2.0% vs 2.6%), furniture & household utensils (3.2% vs 5.1%), healthcare (1.5% vs 1.8%), communication (0.2% vs 1.4%), and culture & recreation (7.2% vs 7.3%). At the same time, inflation was stable for food (at 4.8%), housing (at 0.6%), education (at 1.3%), and miscellaneous (at 1.1%). Meanwhile, prices of fuel, and light dropped the least in a year (-1.7% vs -3.0%), with electricity (-1.0% and -2.5%) and gas (-7.1% vs -9.4%) falling at softer paces as energy subsidies from the government would fully end in May. The core inflation rate fell to 2.6% from a four-month top of 2.8%, slightly below forecasts of 2.7%. Monthly, consumer prices rose by 0.2% in March, the most since last October, after being flat in the prior two months. source: Ministry of Internal Affairs & Communications
ECONOMICS:JPIRYY
by Mr_J__fx
USD/JPY slides – did Tokyo intervene?It has been a remarkable week for the yen, which has exhibited sharp swings throughout the week. The Japanese yen fell as much as 1% earlier and on Thursday but has pared most of those losses. USD/JPY has risen 0.38% to 155.19 at the time of writing. Japan suspected of intervention In the Asian session, the yen fell as low as 157.55 but then recovered to precisely 153. The reason for the swing is unclear but there are strong suspicions that Japan’s Ministry of Finance (MoF) ordered another round of intervention. Japan’s top currency official, Masota Kanda, refused to comment on whether Japan had intervened. Kanda was also mum about whether there was intervention on Monday, when the yen spiked and fell below the 160 level before recovering. Money market movements indicate that the MoF did intervene on Monday, selling as much as $35 billion to prop up the yen. The yen’s swings Monday and today could signal that the MoF has targeted 160 as its “line in the sand” for intervention. Fed holds rates, US dollar slips There was no surprise from the Federal Reserve which maintained the benchmark rate in the target range of 5.25% to 5.50% on Wednesday. This marked a six straight pause, as Fed Chair Powell was clear that high inflation has delayed rate cuts. The rate statement said that inflation had fallen in the past year but there was a lack of progress towards the 2% inflation target in recent months. At a press conference, Powell said that the Fed was not yet confident that inflation was falling closer to the target. Consumer inflation has been moving higher and the US economy remains surprisingly strong, which has complicated the Fed’s plan to provide relief to households by lowering rates. Still, the Powell said the next rate move was unlikely to be a hike, which sent the US dollar broadly lower against the majors on Wednesday. The yen soared as much as 3.2% against on the dollar after the rate announcement and closed on Wednesday with gains of 2%. USD/JPY is testing resistance at 155.13. Above, there is resistance at 157.26 There is support at 152.27 and 150.14
by OANDA
Swiss franc slides after SNB lowers ratesThe Swiss franc has tumbled on Thursday after the Swiss National Bank lowered interest rates. In the North American session, USD/CHF is trading at 0.8987, up 1.35% on the day. Earlier, the Swiss franc fell as low as 0.8994, its lowest level since November 23. There has been plenty of speculation as to when the Fed and other major central banks will lower interest rates, but in the end the Swiss National Bank that took the plunge first, with a quarter-point cut on Thursday. The move was a surprise as investors hadn’t expected the SNB to cut rates until June at the earliest. The SNB lowered the cash rate from 1.75% to 1.50%, sending the Swiss franc sharply lower. SNB President Thomas Jordan said after the meeting that the rate cut was in response to an “effective” battle against inflation. Inflation has been falling and is currently at 1.2%. The central bank also revised lower its inflation forecast to 1.4% in 2024 and 1.2% in 2025. The SNB also noted that the appreciation of the Swiss franc had dampened growth. We could add that the strong Swiss franc has also dampened inflation and allowed the SNB to shift policy and start lowering rates. The Federal Reserve held the benchmark rate at a target range of 5% to 5.25% on Wednesday, as was widely expected. The Fed maintained its projection of three rate cuts this year and revised its GDP forecast for 2024 to 2.1%, up from 1.4% in December. Fed Chair Powell noted that inflation was falling and the US economy was strong, but cautioned that the Fed would not start to cut rates until it was clear that inflation was moving sustainably towards the 2% target. The markets have priced in an initial rate cut for June, with a probability of around 75%. USD/CHF has pushed above 0.8918 and tested resistance at 0.8982 earlier. Above, there is resistance at 0.9095 0.8876 and 0.8812 are providing support
by OANDA
U.S. Core PCE Comes in Lower than Expected U.S Core PCE (FEDS FAVOURITE METRIC) Rep: 2.9% ✅ Lower Than Expected ✅ Exp: 3.0% Prev: 3.2% U.S. Headline PCE Rep: 2.6% ✅ In Line with Expectations ✅ Exp: 2.6% Prev: 2.6% Historical Core PCE Norms On the chart you can see that since 1990 the typical Core PCE range is between 1 - 3% (red dotted lines on chart). We are slowly getting back down into this more historically moderate level. We have just fallen below the 3% level and down into the historically moderate zone for PCE levels. The Federal Reserve have advised that Core PCE is expected to decline to 2.2% by 2025 & finally reach its 2% target in 2026. At this rate we might reach 2% a little sooner than that. For the full breakdown of the Core and Headline PCE and to know the differences between PCE and CPI, please review the Macro Monday I previously released which explains it all (in the comments below). PUKA
ECONOMICS:USCPCEPIAC
by PukaCharts
Gold price bounces off, downside remains bets easeHere is what you need to know on Thursday, January 18: Technical Analysis: Gold price finds a temporary support near $2,000 Gold price attempts a firm-footing near psychological support at $2,000 amid a nominal decline in the US Dollar Index. The near-term demand for the precious metal has turned bearish as it has slipped below the 50-period Exponential Moving Average (EMA), which trades around $2,017. The higher-high-higher-low formation in the Gold price is over and market participants could utilize pullbacks for building fresh shorts. The 14-period Relative Strength Index (RSI) has dropped to near 40.00. If the RSI fails to sustain above 40.00 levels, a bearish momentum will get triggered. •Gold price discovers bets near $2,000 but remains on backfoot amid easing Fed rate cut hopes. •Stubborn US inflation and robust Retail Sales data favour a maintenance of hawkish interest rate stance. •Market participants will focus on Fed Bostic’s commentary ahead. Gold price (XAU/USD) has executed a short-term recovery move in the midst of a persistent downtrend. Gold price printed a fresh monthly low near the psychological support of $2,000 on Wednesday, then bounced. Yet despite the rebound, the precious metal remains on the backfoot as investors continue to worry about when the Federal Reserve (Fed) will start its long awaited rate-cut cycle. The hopes of an early rate-cut decision from the Fed are easing as the last leg of inflationary pressures in the United States is turning out significantly more stubborn than previously thought, due to robust consumer spending and steady labor market conditions. Amid an absence of front-line economic indicators, market participants are expected to shift focus towards the first monetary policy meeting of the Fed, which is scheduled for January 31. The Fed is widely anticipated to keep interest rates unchanged in the range of 5.25-5.50%. Investors will keenly focus on how the Fed proposes to make three rate cuts of 25 basis points (bps) each in 2024, as projected in the December monetary policy meeting. Daily Digest Market Movers: Gold price finds an interim support as US Dollar corrects •Gold price discovers an intermediate support near the psychological $2,000 level after an intense sell-off. •The near-term demand is still downbeat as uncertainty about an interest rate cut from the Federal Reserve in March has deepened. •Trades have pared bets supporting a rate cut in March due to resilience in the US economy. •Bets supporting an interest rate cut of 25-basis points (bps) have increased slightly to 61% but are still below the 75% recorded last week, as per the CME Fedwatch tool. •Market expectations for early cuts from the Fed have been pushed back as price pressures in the US economy remained stubborn and consumer spending grew strongly in December. •Upbeat economic indicators have provided room to Fed policymakers to maintain a restrictive monetary policy stance for a longer period than that anticipated by market participants before their release. •This week, Fed Governor Christopher Waller said the central bank should not rush taking interest rates down as more evidence is needed to ensure that price pressures are returning to 2% in a sustainable manner. •Christopher Waller advised that the Fed should reduce interest rates “carefully and methodically”, considering resilience in the US economy. •Meanwhile, the US Dollar Index (DXY) has rebounded after a gradual correction to near 103.20, supported by risk-off market sentiment. 10-year US Treasury yields are maintaining a firm-footing above 4%. •Later the day, investors will focus on the weekly jobless claims for the week ending December 12 and commentary from Federal Reserve of Atlanta Bank President Raphael Bostic. •Bostic is expected to maintain a hawkish argument considering stubbornly higher price pressures. •On Monday, Fed’s Bostic commented that progress in inflation declining towards 2% could slow if policymakers cut interest rates soon.
OANDA:XAUUSDShort
by sniper_2022
1
Core and Headline CPI RELEASED (Dec 2023 figures)Core and Headline CPI (Dec 2023 figures) U.S. Headline CPI Prev: 3.1% Exp: 3.2% Rep: 3.4% 🚨 HIGHER THAN EXPECTED 🚨 U.S. Core CPI Prev: 4.0% Exp: 3.8% Rep: 3.9% 🚨 HIGHER THAN EXPECTED - but still fell from 4% to 3.9%✅ CORE CPI FALLS BELOW 4% FOR THE FIRST TIME SINCE MAY 2021 We have a long way to go before we reach the Fed Target of 2%. Additional info previously shared: Core vs Headline (the difference) You can clearly see how Core CPI is less volatile than Headline CPI on the chart. Core CPI removes the volatile food and energy expenditures to provide the underlying inflation trend. Food and Energy is included in the Headline inflation which as you can see from the chart is much more volatile and changes direction quicker than core inflation. Its almost like an oscillator around the core inflation line. The Feds 2% Target It is clear that we are not at the Federal Reserve’s target inflation rate of 2% on both fronts (purple line). It is critical to understand that we are still not at or below the target 2% level regardless of the FOMC’s determination of a likely hold on interest rates and reductions to interest rates in 2024. Lets see can the target be met first. You can see that since 2002 Core CPI has fluctuated one standard deviation above and below the 2% inflation level between 1% and 3%. It is clear that we are not back into this standardised zone between 1 – 3%.
ECONOMICS:USIRYY
by PukaCharts
Core and Headline CPI (Release Tomorrow Thurs 11th Jan 2024)Core and Headline CPI NEW CPI Figures released tomorrow Thursday 11th Jan 2024 @ 7:30am Central (for the December 2023 month) U.S. Headline CPI Prev: 3.1% Exp: 3.2% Rep: TBC Tomorrow U.S. Core CPI Prev: 4.0% Exp: 3.8% Rep: TBC Tomorrow Will the US Core CPI finally fall below 4% for the first time since May 2021? Core vs Headline (the difference) You can clearly see how Core CPI is less volatile than Headline CPI on the chart. Core CPI removes the volatile food and energy expenditures to provide the underlying inflation trend. Food and Energy is included in the Headline inflation which as you can see from the chart is much more volatile and changes direction quicker than core inflation. Its almost like an oscillator around the core inflation line. The Feds 2% Target It is clear that we are not at the Federal Reserve’s target inflation rate of 2% on both fronts (purple line). It is critical to understand that we are still not at or below the target 2% level regardless of the FOMC’s determination of a likely hold on interest rates and reductions to interest rates in 2024. Lets see can the target be met first. You can see that since 2002 Core CPI has fluctuated one standard deviation above and below the 2% inflation level between 1% and 3%. It is clear that we are not back into this standardised zone between 1 – 3%. I’ll update you tomorrow with the released figures PUKA
ECONOMICS:USIRYY
by PukaCharts
Top 7 inflation-induced trading opportunities this weekThis week, the focus of many traders will be on US inflation data, which will provide valuable insights into the Federal Reserve's monetary policy outlook. The forecasts indicate a potential 0.2% increase in both headline inflation for December and the core rate. On an annual basis, the headline inflation rate is anticipated to rebound to 3.2% from November's five-month low of 3.1%. Meanwhile, the core rate is likely to ease to 3.9%, the lowest since May 2021. This crucial data will be released on Thursday. In the midst of the US inflation focus, there are noteworthy inflation data releases from other countries, including Switzerland, Australia, Mexico, Brazil, China, India, and Russia. This diverse set of data presents many potential trading opportunities for USD pairs throughout the week: Monday: Switzerland Inflation Rate Tuesday: Australia Monthly CPI Indicator Tuesday: Mexico Inflation Rate Thursday: Brazil Inflation Rate (before US inflation data) Thursday: China Inflation Rate (after US inflation data) Friday: India Inflation Rate Friday: Russia Inflation Rate
by BlackBull_Markets
The Great Inflation AGAIN? US Inflation Rate YoY Comparison - ECONOMICS:USIRYY Stark similarities to the beginning of the Great Inflationary Period (GIP) which ranged from 1965 - 1982. The GIP fractal is not a prediction, it only offers us perspective and context. As an example, US Inflation YoY could potentially bounce around between 3 - 4% for another 32 months as it did between 1975 - 1978 before making any major move. This is a scenario I had not considered, an almost 3 year sideways boring consolidation. We will continue to track this chart to see how it compares moving forward into the future. PUKA
ECONOMICS:USIRYY
by PukaCharts
Comparative Analysis of US and UK EconomiesDear Traders, I would like to offer my perspective on the major economic drivers for USD and GBP. Like the famous investor John Bogle says, "The market may be crazy, but it's not entirely insane. Fundamentals matter." This analysis compares key economic indicators of both countries in order to explore potential impacts on the GBP/USD currency pair in the long term. Examining GDP, growth rates, interest rates, inflation, jobless rates, government finances, external balances, and population dynamics displayed above, I intend to provide insights into the relative strengths and challenges of each economy. ECONOMIC PERSPECTIVE USD exhibits a larger GDP and higher growth rate , implying a more robust economy. They both have similar interest rates, but USD's higher growth puts it in a position of advantage. INFLATION, JOBLESS RATE, AND GOV. FINANCES GBP faces higher inflation, which affects it purchasing power against USD. Both nations show low jobless rates; the UK maintains a lower debt-to-GDP ratio (good for GBP). EXTERNAL BALANCES AND POPULATION DYNAMICS Both countries have current account deficits, but the UK's larger deficit may affect its currency negatively. USD represents a significantly larger population, influencing economic scale. MY TAKE Understanding the economic dynamics of USD and GBP is crucial for interpreting potential influences on the GBP/USD pair in the long term. From the economic data and analysis presented above, it is evident that USD shows economic strength , while GBP shows stability . In the light of this, I expect a stronger USD (DXY) in the coming weeks or months. The currency pair may see fluctuations as institutions assess these strengths and challenges, but my bias on the GBPUSD pair is BEARISH. A break below 1.2451 will likely send the pair to 1.2207 price region or even lower.
Short
by Samuel124
3
IWN Russel Index ETF ShortIWN on the reliable daily chart has been trending down for two in a descending channel as shown on the chart with upper and lower trendlines drawn with the tool. The Stochastic RSI oscillates in the interval between oversold and over bought and presently is well overbought at nearly 100. While the RSI may double top like it did in July, it is at least right now at the first top. The zero lag MACD is confirmatory with a K/D line cross well above the histogram. I will play this by buying a put option at a strike of $ 150 for October 24 If Biden tries to prompt up the market to gain a re- election and is successful, this will get stopped out. If interest rates are not pulled back by the fed soon, small caps will continue to get crushed. On the other hand when rates are pulled back, they will be nimble and recover quicker than the large caps and it will get stopped out. I think the fed will pullback rates to help Biden out, although the fed is not partisan ? Oil prices in their downward trend lend support to a slow fall off in the inflation rate. What goes for IWN also goes for DIA.
AMEX:IWNShort
by AwesomeAvani
Real Interest Rate: How It Affects the Economy and Forex MarketReal interest rate is the interest rate adjusted for inflation. Nominal interest rate is the reported rate, while real interest rate is the actual rate that the borrower receives after accounting for inflation. The formula for calculating real interest rate is as follows: Real interest rate = Nominal interest rate - Inflation rate For example, if the nominal interest rate is 5% and the inflation rate is 3%, then the real interest rate is 2%. Real interest rate plays an important role in the economy. High real interest rates can encourage investment and economic growth. Conversely, low real interest rates can dampen investment and economic growth. Real interest rate has a significant impact on the forex market. An increase in the real interest rate will make the domestic currency more attractive to foreign investors. This is because foreign investors can earn higher returns from their investments in countries with high real interest rates. An increase in the real interest rate will cause the domestic currency to appreciate against foreign currencies. This is because foreign investors will increase demand for the domestic currency to invest. A decrease in the real interest rate will cause the domestic currency to depreciate against foreign currencies. This is because foreign investors will reduce demand for the domestic currency to invest. Here are some examples of the impact of real interest rates on the forex market: In 2022, the US Federal Reserve (The Fed) raised the real interest rate. This caused the US dollar to appreciate against other currencies. DXY USDJPY USDDKK USDCNH In 2022, the European Central Bank (ECB) lowered the real interest rate. This caused the euro to depreciate against other currencies. EURCAD EURCHF EURSEK Governments and central banks can use the real interest rate as one of the instruments of monetary policy to influence the exchange rate of the currency. For example, if the government wants to increase the exchange rate of the domestic currency, the government can raise the real interest rate. Real interest rate can be used to predict the movements of currency pairs. Currency pairs with higher real interest rates tend to appreciate against currency pairs with lower real interest rates. Here are the steps for using real interest rate to predict the movements of currency pairs: Collect data on real interest rates from the two countries whose currencies form the currency pair. Compare the real interest rates of the two countries. If the real interest rate of country A is higher than the real interest rate of country B, then the currency pair A/B will tend to appreciate. For example, the real interest rate of the United States is 1.8%, while the real interest rate of Japan is -3.1%. Therefore, the currency pair US dollar/Japanese yen (USD/JPY) will tend to appreciate by 4.9%. Real interest rate is only one factor that affects the movements of currency pairs. Other factors that should also be considered include economic and political factors that can affect the demand and supply of the two currencies.
Education
by DNP-FX
Yield Curve Flattening. Can the Fed afford to pull the trigger??The U.S. Yield Curve (US10Y-US02Y) flattening is a textbook sign of recession. However the S&P500 (blue trend-line) keeps recovering and rising from the 2022 Inflation Crisis. At the same time, the Inflation Rate (black trend-line) may have taken a pause but is on a strong decline, while the Interest Rate (orange trend-line) is turning sideways. The question on everyone's mind is this: "Can the Fed afford to pull the trigger and start lowering rates again?". There is no easy answer to this. Recent history on this chart shows that a rising curve along with lowering interest rates and inflation decline is correlated with Bear Cycles. Notable examples are 2007 - 2008 and 2000 - 2001. At the same time notable exception is 2020. In 1995 both Interest and Inflation rates turned sideways so the stock market extended the aggressive rally into the DotCom bubble. In 1989 - 1990 however, the Curve flattening coincided with a non-stop drop on the Interest rate while in late 1990 Inflation also started to drop. The stock market didn't enter any Bear Cycle but insted kept rising slowly but steadily. Approximately what is taking place now. Do you think we are in a same pattern and stocks will be unfazed if the Fed starts lowering the rates? ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! This is best way to keep it relevant, support us, keep the content here free and allow the idea to reach as many people as possible. ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
TVC:SPX
by TradingShot
5
So… how’s that deflation narrative looking?We’ve become so accustomed to headlines of ‘peak inflation’ and falling input prices that some have been throwing the wonderful ‘deflation’ word around. And we think most would enjoy a bit of deflation, as that would result in lower interest rates. However, with commodity prices (particularly oil) being a key driver of inflation, a lot of the softness can be tied back to the underperformance of commodities over the past 12 months. Supply chain disruptions have also been in the rear-view mirror and no longer a concern (or are they?) Over 30,000 UPS workers are vowing to strike if a new pay deal is not negotiated by 1 August, which should throw a nice spanner in the works of the US (and global) parcel delivery system. Russia has pulled out of a key grain deal and is bombing Ukraine ports to derail trade in the Black Sea. And India has banned rice exports (apart from Basmati) to fight domestic inflation, adding to fears of another round of food inflation. It is therefore worth noting that the Thomson Reuters CRB commodities index is seemingly breaking out of a 12-month retracement on the monthly chart. Furthermore, the retracement lasted 11 months before June’s small bullish candle, so the broad commodities index may have bottomed in May at -19.8% y/y. And assuming this is the breakout of a falling wedge, it projects a target around the 329.60 high. But if it were deemed a bull flag, the target sits around 365. And what do we think will happen to consumer prices further down the track? Of course, they will begin to rise again. And the worrying fact is that inflation tends to come and go in waves, so if commodities continue to rally then it looks like the next wave of rising y/y inflation is pending.
TVC:TRJEFFCRBLong
by CityIndex
The DIRECT link to Inflation and OilExplanation all in the chart but the link between Inflation and Oil is all there to see but NEVER mentioned. It just make sense, as the price of oil rises, so will EVERYTHING from transport to manufacturing and retail. Over 6000 House holds goods require Oil If the price of oil is controlled, then so is inflation Maybe this is why the USA has spent decades invading countries that produce Oil but more than anything, used the Petro$, insisted on the use of th epetro$, as designed by Nixon in 1971, to produce a massive inflow of money into the USA This however, is now changing as countries, including OPEC move away from usng the $ for Oil Trade.
TVC:USOIL
by Orriginal
CPI & Inflation Rate USHello everyone! Let's take a look on what happened yesterday on the US financial market and understand the impact of CPI and inflation rate. The Consumer Price Index (CPI) and inflation news from the United States can have a significant impact on financial markets and the value of the U.S. dollar. The CPI measures the change in the price of a basket of goods and services consumed by households, and inflation is the rate at which the general level of prices for goods and services is rising. When the CPI and inflation numbers are higher than expected , it can indicate that the economy is growing, which can boost stock prices, lead to higher interest rates, and appreciate the dollar. This is because as the economy grows, companies will see increased demand for their products and services, which can lead to higher profits and stock prices. Higher interest rates can also attract more investors to bonds, which can lead to higher bond prices. Additionally, a strong economy can lead to increased demand for U.S. goods and services, and increased foreign investment in the U.S. economy. As a result, the demand for dollars increases, which can lead to an increase in the value of the dollar. On the other hand, if the CPI and inflation numbers are lower than expected , it can indicate that the economy is slowing down , which can lead to lower stock prices, lower interest rates and depreciation of the dollar. This is because as the economy slows down, companies will see decreased demand for their products and services, which can lead to lower profits and stock prices. Lower interest rates can also lead to less investors in bonds, which can lead to lower bond prices. Additionally, a weak economy can lead to decreased demand for U.S. goods and services, and decreased foreign investment in the U.S. economy. As a result, the demand for dollars decreases, which can lead to a decrease in the value of the dollar. It's important to note that the Federal Reserve uses inflation as an indicator to change the monetary policy, as they use interest rates as a tool to control inflation. Typically if inflation is too high, the Fed will increase interest rates to slow down the economy and curb inflation, and if inflation is too low, the Fed will decrease interest rates to stimulate the economy. These monetary policy decisions can also have an impact on the value of the dollar, as when the Fed raises interest rates, it can make the U.S. a more attractive place to invest, which can lead to an appreciation of the dollar. Conversely, when the Fed lowers interest rates, it can make the U.S. a less attractive place to invest, which can lead to a depreciation of the dollar.
ECONOMICS:USCPIEducation
by m_maia14
GOLD SHORT TO 1570📉Self explanatory as all the analysis is on the chart. But market has grabbed liquidity by taking out 1810 highs and peaking at 1822. Since then Gold has crashed back down below 1778, taking out the last low and changing the market structure which now indicates a sell. Gold is currently sitting at a resistance zone, which I am looking to short from. However, it is possible since its the end of the week, that market might move a little higher towards 1798-1802 for further liquidity at the start of next week before deciding to melt. Let's see how this move plays out! Drop a follow to keep up with the latest updates.
SAXO:XAUUSDShort
by BA_Investments
US dollar index: DXY bull trend over as inflation cools? DXY fundamental analysis The dollar tumbled after US consumer inflation data fell more than expected in October. Annual headline inflation ECONOMICS:USIRYY fell to 7.7% in October, from 8.2% the previous month and below the 8% predicted. The core measure of inflation ECONOMICS:USCIR , which excludes volatile energy and food costs, fell to 6.3% from 6.6%, falling short of expectations (6.5%). The monthly increase in headline inflation was 0.4% instead of the 0.6% that was expected, and the core increase in inflation was 0.3% instead of the 0.5% that was expected. Lower-than-expected US inflation has prompted investors speculating on slower Fed rate hikes in the future. The probabilities for the December meeting have swung in favour of a 50 basis point hike, which is currently factored with an 80% chance, up from 50% before the CPI release. The expected terminal rate at which the Fed's rising cycle will terminate in May 2023 has decreased to 4.80% from 5.08% before to the inflation report. This means that the markets are currently pricing in an increase of just over 75 basis points until May 2023. US 2-year Treasury yields, which reflects expectations for the Fed monetary policy sunk by 26bps to 4.3%. Expectations of Fed terminal increases and rising US 2-year Treasury yields have supported the DXY bull trend throughout the year. Reduced rate hike expectations are bad news for the dollar, but Fed Chair Jerome Powell's comments at October's FOMC meeting suggest it's premature to declare the end of the raising cycle. Technical analysis The DXY daily chart would suggest that we may be facing the end of the dollar's bullish trend, as the price action in the November 10th session actually broke down the bullish trendline of 2022, and lowered even further than the 50-day moving average. However, for a confirmation of that trend reversal in the DXY, we should likely wait until major Fibonacci retracement levels are cleared by price action. The next level of support is 107.1 (38.2% Fibonacci level of 2022 range), followed by 104.7, which would represent a 50% retracement of the 2022 dollar rally. If bears can break through that barrier, it would mean that they will be in charge of the dollar trend. However, if the Fed pushes back against the slowdown in the inflation rate and signals a more restrictive monetary policy than the market is actually pricing in, we might see some bulls reappear on DXY dip. This contrarian scenario, which seems less likely for the market, could effectively limit the downward movement of the USD.
CAPITALCOM:DXY
by Capitalcom