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Will the USA CPI remain strong tonight, is the rate cut in December in suspense?
Wall Street expects that in October, the core CPI will increase by 3.3% year-on-year, remaining unchanged from the previous value, with a month-on-month growth rate staying at the level of 0.3% for the third consecutive month. Inflation remains sticky, and the possibility of a 25 basis point rate cut in December has decreased from around 80% before the election to about 60%. In addition, the market is concerned that Trump's policies may hinder inflation returning to the Federal Reserve's target, requiring interest rates to return to a neutral level more slowly.
Key test! The first post-election inflation data will be released tonight. Will the Federal Reserve still cut interest rates in December?
Inflation is expected to remain strong.
On the eve of CPI, the bears are adding shorts! Be careful of a possible crash tonight.
If any signs of USA CPI announced on Wednesday are faster than expected, it may further strengthen the confidence of these bears.
Is the strong dollar storm coming back? Trump is a variable!
Wall Street predicts that Trump's return to the White House will lead to a stronger dollar, but some believe it may have already gone too far.
Rising too fast! On the eve of CPI data, the US bond yield approaches the key resistance level of 4.5%.
The overnight yield on the 10-year US Treasury bond rose to a four-month high of 4.43%, just a step away from the key resistance level of 4.5%. Once the yield exceeds 4.5%, the only barrier to reaching 5% will be 4.66%. In addition, the rise in US Treasury yields is also putting pressure on US stock valuations.
CPI rebound alarm sounded? Fed may press the pause button on interest rate cuts early next year.
Economists expect the overall CPI to rebound for the first time in eight months in October, while core CPI also remains sticky.