Join +750K new investors every month who copy stock picks from billionaire's portfoliosSign Up Free

Markets Eye U.S. CPI Data

Published 12/13/2022, 06:00 AM
GBP/USD
-
BTC/USD
-

Stock markets are tentatively higher in Asia, while Europe and the US are poised for a similarly modest start to trade in what is the start of a hectic 72 hours in the markets.

For so many weeks now, the December Fed decision has dominated traders' minds, while sentiment in the markets has been dictated by how small changes in various data points influence the outcome of the meeting.

When a meeting or event generates this much hype, it can often disappoint and be something of an anticlimax, but I’m not sure that will be the case this time. It’s not the decision itself but what accompanies it that will set the stage for next year.

For so long, the question has been will the Fed hike into a recession. In that time, it’s remained convinced that a soft landing can be achieved, and the resilience of the economic data has supported that. Still, unfortunately, the same resilience has also supported the case for more hikes and a higher terminal rate.

Last month’s CPI release gave investors real hope that in much the same way that inflation’s acceleration higher this year blew expectations out of the water, the path lower may also not be as gradual as feared.

Unfortunately, some of the data since then hasn’t been so favorable – most notably the wages component of the jobs report – so a lot is now hanging on today’s release. Another number below forecasts of around 7.3%, year on year, could get the excitement flowing once more.

Jobs data keeps pressure on BoE

The GBP/USD is relatively steady after the release of the UK jobs data that was in line with market expectations. Unemployment rose marginally to 3.7% while wages rose by 6.1%.

While the data does indicate some additional slack in the labor market, the wages number – despite falling well short of inflation – will be of concern to the BoE and ensure its foot remains firmly on the brake in the short term.

Steady despite FTX developments and Binance concerns

Bitcoin continues to trade around $17,000, undeterred by reports of Sam Bankman-Fried’s arrest and possible charges for money laundering against Binance.

Withdrawals on the platform highlight the uncertainty and shattered confidence in the space, a desperation not to be caught up in another FTX event. Even when the situation looks very different.

But that’s what fear does, especially when confidence has been so severely damaged, as it has in recent weeks.

Original Post

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.