$CNIRYY -China's CPI (September/2024)ECONOMICS:CNIRYY
Inflation Data (September/2024)
source: National Bureau of Statistics of China
-China’s annual inflation rate stood at 0.4% in September 2024,
below market forecasts and August’s figure of 0.6%.
This was the 8th month of consumer inflation but was the lowest print since June,
highlighting the need for more policy support from Beijing to address growing deflation risks.
Non-food prices declined by 0.2%, following a 0.2% rise in August as the cost of transport shrank further (-4.1% vs -2.7%) due to lower crude oil prices.
Also, housing prices edged down (-0.1% vs flat reading) amid government efforts to further regulate the property market. Meanwhile, cost slowed for health (1.2% vs 1.3%) and education (0.6% vs 1.3%).
On the food side, prices rose for the second month, with the rate of increase the fastest in 20 months (3.3% vs 2.8%).
Core consumer prices, excluding food and energy costs, increased 0.1% yoy, the smallest rise since February 2021, after a 0.3% gain in August. Monthly, the CPI was unchanged, compared with consensus and August’s print of a 0.4% rise.
Economy
$USSIRY -U.S CPI (September/2024)ECONOMICS:USIRYY
US Inflation Rate Slows Less Than Expected
source: U.S. Bureau of Labor Statistics
-The annual inflation rate in the US slowed to 2.4% in September,
the lowest since February 2021 but surpassing market expectations of 2.3%.
Compared to the previous month, the CPI increased by 0.2%, the same as in August.
Meanwhile, annual core inflation unexpectedly rose to 3.3%, while the monthly gauge remined at 0.3%.
Long Term Prediction on Inflation Rates - 2031history may not repeat itself, but it rhymes... or so they say. But in this case, so far we have an EXACT repeat, starting in 2015. The chart uses the exactly same angles and duration from the inflation we had in the 1970s. I put this together around 6 months ago and so far... it continues to track.
You be the judge of what's going to happen. Of course, time will tell and we'll see how it all plays out.
$EUIRYY -CPI (September/2024)ECONOMICS:EUIRYY (Eurozone Inflation Data; September/2024)
source: EUROSTAT
- Annual inflation rate in the Eurozone fell to 1.8% in September 2024, the lowest since April 2021, compared to 2.2% in August and forecasts of 1.9%, preliminary estimates showed.
Inflation is now below the ECB target of 2%.
Prices fell much more for energy (-6% vs -3%) and inflation slowed for services (4% vs 4.1%) while prices for food, alcohol and tobacco increased slightly more (2.4% vs 2.3%).
Meanwhile, core inflation rate also eased to 2.7% from 2.8%.
Among the bloc's largest economies, inflation slowed in Germany (1.8% vs 2%), France (1.5% vs 2.2%), Italy (0.8% vs 1.2%), Spain (1.7% vs 2.4%).
The ECB expects inflation to rise again in the latter part of 2024, partly because previous sharp falls in energy prices will drop out of the annual rates.
Inflation should then decline towards 2% over the second half of 2025.
NFP & Port Strikes: Why Jobs Matter This Week Nonfarm Payrolls (NFP) are projected to rise by 140,000 in September, matching August's pace and pushing the three-month average job gains to the weakest level since mid-2019. The NFP data is due this Friday.
At the same time, a major labor disruption is underway. Dockworkers at 14 key ports, handling roughly half of U.S. trade, have launched an indefinite strike. The walkout could disrupt trade and strain the economy ahead of the presidential election and the crucial holiday shopping season.
Chicago Fed President Austan Goolsbee expressed concern that a prolonged strike could worsen supply chain bottlenecks, exacerbate inflation, and alter expectations for the Federal Reserve's next move on interest rates.
Goldie Locks & The 3 Bears, BangBros edition Goldie Locks is all snuggled up in the bear's bed, eating all their porridge and dreaming of lotto AI calls. Blinded by greed and her own eye-lids; she can't see the compromising position she's put herself in. This ain't no fairy tale, tho. It won't be pleasant, or short. You will beg for Daddy, tho. #bearporn
Why The Fed Lowered Rates - My Opinion Part IThere has been a lot of speculation as to why the Fed lowered interest rates by 50bp.
My opinion is the Fed realized the pressure of a stronger US-Dollar and stronger US economy, headed into the POTUS election accompanied with new spending/policy related to a new POTUS, could put the global markets under extreme currency/economic pressures.
So, in order to provide more breathing room for the global economies, the US Fed decreased rates, taking a bit of pressure off currency rate divergences and allowing global central banks a bit of room to manage their economies against the 900-lb Gorilla (which is the US economy/US-Dollar).
In short, the US Fed needed to alleviate pressure put on the Global markets because of the 900-lb Gorilla US economy.
Not to save the US economy from an internal crisis...
But to save the world from a crisis of their own making. A Global Credit/Debt crisis has been brewing since before 2008.
The US Fed "gave in" and decided they had to decrease rates to reduce the risk of a foreign market contagion event (currencies/debt).
In my opinion, that is the only reason the Fed lowered rates.
Get some.
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$USINTR -Fed Cuts Rates by 50 BPS ECONOMICS:USINTR
- The Federal Reserve lowered its benchmark interest rate by 50bps to 4.75%-5% in light of the progress on inflation and the balance of risks.
It is the first rate cut since March 2020 after holding it for more than a year at its highest level in two decades.
Will Feds decision of cutting 50bps tumble the markets in spite of fear for U.S and Global Markets indicating Recession brewing around the corner ?
$GBIRYY CPI (August/2024)ECONOMICS:GBIRYY CPI Data (August/2024)
'UK Inflation Rate Steady at 2.2%'
source: Office for National Statistics
- Annual inflation rate ( ECONOMICS:GBIRYY ) in the UK steadied at 2.2% in August 2024,
the same as in July, and in line with expectations.
The largest upward contribution came from air fares while the biggest downward contributions came from prices for motor fuels, and restaurants and hotels.
Compared to the previous month, the CPI rose 0.3%,
following a 0.2% fall in July and also matching expectations.
SPX direction after first and last FED rate cutsThis chart compares FED rate cuts to SPX chart.
The last 3 times after the first rate cuts there was a slight upward rally of the SP500 of about 5-10%, before going on a bearish retrace of about -40%, -50% & -20%, and then bottoming out only AFTER the final rate cut.
Based on this, if history repeats, there might be a year end upward movement in the stock market, perhaps followed by a retrace through 2025 until the final rate cut. And then massively up from there again.
The last 3 times rate cuts did not mean sp500 starts going up immediately. There was a retrace instead. SP500 went up only AFTER the final rate cut.
Yield Curve Reversion Trade 2024The yield curve reversion is when the US10Y Treasury Yield becomes greater than the US2Y Treasury Yield and has a track record for signalling recession. I've been tracking the reversion for the past two years for any hint of sense of whether the US FED would cut FEDFUNDS rates or if bond traders would drive yields/prices towards reversion. This time, the fed's narrative is driving the reaction here.
To express this idea I've put on long CBOT_MINI:10Y1! and short CBOT_MINI:2YY1! via the futures market. I'll keep rolling the futures contracts until the yield curve starts to form a top, likely a spread value between 1.5-3.0.