Eyes On US Inflation Data And Gold & Silver Benefit From Softer USD
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Global indices made a solid start to the week. The EuroStoxx 600 closed yesterday 1.76% higher on news that the Ukrainians are doing well pushing back the Russians in territories they launched a counteroffensive attack. The S&P500 and Nasdaq advanced more than 1%, despite chatter of rail strike in the US. Hope of softer US inflation is what keeps the bulls running.
US inflation data
US inflation data is due today, and the CPI is seen easing toward 8.1% in August versus 8.5% printed a month earlier, and 9.1% peak printed the month before. A second month of soft inflation read has the power to soften the Fed hawks and increase the bets of softer rate hikes beyond September, whereas a figure above expectations, or worse, a figure above last month’s read could snap the latest rally and send the stocks tumbling.
We are tilted toward a softer read than not.
Hope of a soft inflation data is also what’s pulling the US dollar lower across the board. The dollar index tipped a toe below the 108 mark yesterday, while the EURUSD made an attempt above its 50-DMA, as news that Ukrainian troops are being successful in their counteroffensive attack, and chatter that voices are rising in Russia against the regime’s strategy in Ukraine, brought forward the possibility of Russia being defeated in Ukraine. Cable flirts with the 1.17 level, the dollar-swissy retreated to 0.95 and the USDCAD slipped below 1.30.
The American crude, gold and silver are better
The American crude rallied more than 2% yesterday on improved market sentiment, and flirted with the $90 offers, without however being able to clear them. Gold and silver are also better bid into the inflation data, thanks to a broadly softer US dollar.
Watch the full episode to find out more!
- 0:00 Intro
- 0:25 Equities extend gains
- 0:58 … despite discouraging news for US retailers
- 2:25 US inflation is all that matters
- 6:20 USD soft pre-CPI, EUR gains on Ukraine news
- 7:15 Pound firmer but…
- 8:40 Crude oil flirts with $90
- 9:00 Gold & Silver benefit from softer USD
Ipek Ozkardeskaya
Ipek Ozkardeskaya has begun her financial career in 2010 in the structured products desk of the Swiss Banque Cantonale Vaudoise. She worked at HSBC Private Bank in Geneva in relation to high and ultra-high net worth clients. In 2012, she started as FX Strategist at Swissquote Bank. She worked as a Senior Market Analyst in London Capital Group in London and in Shanghai. She returned to Swissquote Bank as Senior Analyst in 2020.
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