Will the Inflation Report Deliver?

European equity markets opened cautiously higher on Thursday, following a mixed session in Asia amid nerves around the US inflation release later in the day. This inflation print has been the main topic of conversation all week. The jobs report last Friday changed the dynamic in the markets and ensured that not only was this […]

Japanese Yen Jumps on BoJ Report

The Japanese yen has awoken from this week’s slumber and is sharply higher on Thursday. In the European session, USD/JPY is trading at 130.96, down 1.16%. BOJ may be planning review of policy The BOJ has been in the headlines since the December meeting when it widened the band around its 10-year bond yield target. […]

Chinese Inflation Turns to Acceleration

China picked up the torch this morning with the publication of national inflation data. In December, the consumer price index rose from 1.6% to 1.8% y/y. Producer prices, an important leading indicator for national and global inflation, are losing 0.7% y/y, the third consecutive month of y/y decline. While consumer prices matched expectations, producer prices […]

GBP/USD Drifting, UK GDP Next

The British pound is drifting for a third straight day. In the European session, GBP/USD is trading at 1.2161, down 0.09%. We could see stronger volatility from the pound before the weekend, with the release of the US inflation report and UK GDP on Friday, both of which are market movers. Will US inflation continue […]

US: Inflation Continues to Ease in December, Auguring for a Slower Pace of Rate Hikes 

The Consumer Price Index fell 0.1% month-on-month (m/m) in December, slightly below expectations calling for a flat reading. On a year-on-year (y/y) basis, headline inflation fell to 6.5% (down from 7.1% the month prior). Energy prices declined by 4.5% m/m, entirely due to a sharp drop in gasoline (-9.4%% m/m) prices. Energy services (+1.5% m/m) […]

December CPI: Three's a Trend

Summary Inflation continued to ease in December. The headline CPI fell 0.1% in the month, and December marked the third consecutive increase in the core index of 0.3% or less. A major decline in gasoline prices helped keep headline inflation in check, but the signs of slower inflation extended beyond prices at the pump. Grocery […]

Sunset Market Commentary

Markets The much-anticipated US December CPI reading literally couldn’t be more spot on. Monthly headline dynamics eased as expected from 0.1% to -0.1% m/m, resulting in a deceleration of the yearly figure from 7.1% to 6.5% y/y. Energy was a main contributor to easing prices, dropping more than 9% on a monthly basis. Core inflation […]

German GDP, Spanish CPI and Can Europe Avoid a Recession?

Goldman Sachs has been one of the recent major banks to upgrade its expectations for the Euro Zone for the coming year. It had previously expected the shared economy to fall into a recession in the first half of the year. Now, the forecast shows an expectation that the Euro Area will just barely avoid […]

Underlying Price Pressures Moderating in the US

Market movers today We get the US 5-10 years consumer inflation expectations from the University of Michigan, which the Fed follows closely. It is currently at 2.9%, which still suggests that inflation expectations are anchored. Germany releases GDP for all of 2022 while Sweden is next in line to publish CPI inflation for December. Today, ECB will publish the […]

Attention Shifts to US Bank Earnings

US inflation came in line with expectations. The kneejerk market reaction to the data was surprisingly negative, but the major US stock indices extended rally, while the US dollar dropped sharply. Why was the kneejerk reaction bad? Because investors were expecting nothing but a softer-than-expected figure; the hidden expectation was a read below 6.5% for […]