Good morning guys! ☕️
I`m still staying aside and observe as the market is very weak in volume.
The big players highly await the US-CPI-Data since they never had such a strong importance to the market, as this should offer new clues on how aggressively the Federal Reserve will tighten monetary policy this year.
Almost nothing moved until yesterday due to rumors by JP Morgan saying that inflation has reached its peek and that todays CPI should be lower than expected.
This would obviously be good for stocks and the risk-on-sentiment which has a strong impact on a lot of currencies since the most hawkish scenario is probably already priced in.
Especially stocks that benefit from deflational-scenarios like tec-stocks were pumping (compare NASDAQ100 to SPX500).
For example:
AUD/USD aswell as NZD/USD were following the risk-on-mood of the stockmarket, while EUR/USD and GBP/USD were volatile without any direcction.
A high and longer lasting inflation than expected while the economy slows down is currently the markets biggest fear as one of the most important tools to boost the economic growth is liquidity, so lower interest-rates and for example quantative easing.
If inflation is already high central banks can not really support the market with more financial injection, means the higher the inflation the less likely it gets to see more fiscal support to boost consume and investment and that would not be good for companies, and so for stocks.
Simply put:
1️⃣ A lower CPI could confirm yersterdays rally due to expectations for less rate-hikes this year by the fed 👉US-Dollar should fall!
2️⃣A higher CPI could spread fear in the market due to expectations for a very tight monetary policy by the fed 👉 US-Dollar should rally!
Several companies have already lowered their earning-expectations for this year as they expect a harsh hawkish run by Jermome Powell.
Let`s see whether data can confirm the markets rally or not.👊
SPX500 👉
EUR/USD 👉
I`m still staying aside and observe as the market is very weak in volume.
The big players highly await the US-CPI-Data since they never had such a strong importance to the market, as this should offer new clues on how aggressively the Federal Reserve will tighten monetary policy this year.
Almost nothing moved until yesterday due to rumors by JP Morgan saying that inflation has reached its peek and that todays CPI should be lower than expected.
This would obviously be good for stocks and the risk-on-sentiment which has a strong impact on a lot of currencies since the most hawkish scenario is probably already priced in.
Especially stocks that benefit from deflational-scenarios like tec-stocks were pumping (compare NASDAQ100 to SPX500).
For example:
AUD/USD aswell as NZD/USD were following the risk-on-mood of the stockmarket, while EUR/USD and GBP/USD were volatile without any direcction.
A high and longer lasting inflation than expected while the economy slows down is currently the markets biggest fear as one of the most important tools to boost the economic growth is liquidity, so lower interest-rates and for example quantative easing.
If inflation is already high central banks can not really support the market with more financial injection, means the higher the inflation the less likely it gets to see more fiscal support to boost consume and investment and that would not be good for companies, and so for stocks.
Simply put:
1️⃣ A lower CPI could confirm yersterdays rally due to expectations for less rate-hikes this year by the fed 👉US-Dollar should fall!
2️⃣A higher CPI could spread fear in the market due to expectations for a very tight monetary policy by the fed 👉 US-Dollar should rally!
Several companies have already lowered their earning-expectations for this year as they expect a harsh hawkish run by Jermome Powell.
Let`s see whether data can confirm the markets rally or not.👊
SPX500 👉
EUR/USD 👉
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.