us inflation

Silver climbs to near $28, tracking rally in gold

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Silver climbs to near $28, tracking rally in gold

Silver is trading at a two-year high near .00 per ounce, driven by heightened consumer and industrial demand as well as central banks increasing their reserves in gold. US Treasury yields have corrected after two days of gains, with the 2-year and 10-year yields standing at 4.78% and 4.39%, respectively. Traders are eagerly awaiting the release of the US Consumer Price Index data scheduled for Wednesday, with expectations of an acceleration in the headline CPI and a cooling down in the core measure. Geopolitical tensions in the Middle East have eased, with peace talks between Israel and Hamas resuming in Egypt. Traders will focus on the upcoming US inflation data and the release of FOMC minutes this week to gain more clarity on the timing of the Fed’s monetary policy adjustments.

Currency markets are in a deep freeze. Rate cuts and Trump could thaw them

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Currency markets are in a deep freeze. Rate cuts and Trump could thaw them

Traders and investors are looking to global interest rate cuts and the closely-fought US election to bring the world’s currency markets out of their deepest lull in almost four years.

Sterling bows to dollar strength after UK GDP data

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Sterling bows to dollar strength after UK GDP data

The pound eased after data confirmed the UK economy entered recession in the second half of last year.

Euro-dollar stabilises after ECB rate cut comments

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Euro-dollar stabilises after ECB rate cut comments

The European Central Bank (ECB) is considering cutting interest rates in June, causing weakness for the Euro and depressing the EURUSD pair. ECB officials have expressed dovish views on rate cuts, while the Federal Reserve in the US seems more split on the issue. Bargain hunters may see dips in the EURUSD pair as a buying opportunity, and economists at ING expect the pair to stabilize around 1.0850.

Euro awaits US data, ECB speakers

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Euro awaits US data, ECB speakers

The EURUSD exchange rate was trading in the mid 1.0900s after reaching a peak at 1.0981 the previous week. Upcoming data releases and events are expected to introduce some volatility to the Euro-dollar pair. In the US, upcoming factory gate inflation and Retail Sales data could influence expectations regarding the Federal Reserve’s timeline for interest rate cuts, which is a significant factor for the US Dollar. Economists anticipate a decrease in Core PPI to 1.9% year-over-year in February from 2.0% in January, with a month-on-month forecast showing a 0.2% increase compared to the 0.5% increase the previous month. The headline Producer Price Index (PPI) is expected to show a 1.1% year-over-year gain, up from 0.9% in January, and a 0.3% month-on-month gain, consistent with the previous month. This data is a crucial indicator for CPI inflation, as increases in wholesale costs are typically passed on to consumers. Market participants are betting on a 67.2% probability of the Fed cutting interest rates in June, according to the CME FedWatch Tool. US Treasury Secretary Janet Yellen stated that it seems unlikely for interest rates to return to pre-COVID-19 levels and deemed the interest rate projections in President Biden’s budget plan as “reasonable.” In Europe, several ECB officials are set to speak, potentially providing insights into whether interest rates will be cut in April or June. If inflation remains high, interest rates are likely to stay elevated, supporting the Euro. ECB Governing Council member Francois Villeroy de Galhau indicated a preference for an April rate cut, while Bank of Austria Governor Robert Holzmann and ECB President Christine Lagarde suggested a June timeline for revisiting rate policies. The timing of ECB rate cuts could impact the Euro and EURUSD exchange rate. After recent US inflation data, a calmer period is expected in the EURUSD pair ahead of the next week’s Federal Reserve meeting.

Gold poised to hit $2,250 Q2 target, say economists

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Gold poised to hit $2,250 Q2 target, say economists

Gold’s price decreased by 1.1% following a higher-than-expected US inflation report. Economists from TD Securities predict that the price of gold may decrease further to a range between ,025 and ,100. The February Consumer Price Index (CPI) showed core inflation at 0.4% month-over-month, reaching 3.8% year-over-year, and headline inflation also increased by 0.4% month-over-month to 3.2% year-over-year. This inflation data suggests the Federal Reserve may not reduce interest rates soon. Despite this, TD Securities still sees potential for gold to reach a ,250 target in the second quarter if economic data continues to weaken. ANZ Bank economists also noted that the unexpected US inflation figures have negatively impacted gold prices, affecting market expectations for a rate cut in June. Commerzbank analysts attribute the recent rise in gold prices to speculative financial investors, with net long positions in gold futures increasing significantly. However, they caution that higher-than-expected US inflation could lead to a decrease in gold prices, especially if speculative investors decide to take profits.

WTI moves in tight range, hovers around $77.80

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WTI moves in tight range, hovers around $77.80

– The benchmark West Texas Intermediate (WTI) crude oil price was around .80 per barrel in Asian trading on Tuesday.
– Oil markets are awaiting the release of the Consumer Price Index (CPI) data from the United States, with expectations for a modest uptick in February’s US inflation figures, but the annual index is forecasted to hold steady.
– A strong CPI report could decrease the likelihood of an immediate rate cut by the Federal Reserve, potentially bolstering the US Dollar and challenging crude oil prices.
– The probability of a rate cut in June has slightly decreased to 68.9%, according to the CME FedWatch Tool.
– Market participants are looking forward to monthly market reports from OPEC, the International Energy Agency (IEA), and the Energy Information Administration (EIA) to assess the global demand outlook.
– ANZ analysts expect demand projections from the monthly reports of the three major oil agencies to remain largely unchanged, but any unexpected upward revisions could alleviate demand concerns.
– The US has led global oil production for the sixth consecutive year, with a record-breaking average production of 12.9 million barrels per day (bpd).
– US crude oil production reached a new monthly record high of over 13.3 million bpd in December.

CPI kills last hope for March Fed rate cut

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CPI kills last hope for March Fed rate cut

The U.S. inflation report for January showed higher-than-expected inflation across the board. The headline and core monthly readings were 0.3%, while the annual readings were 3.1% and 3.9% respectively. This data has decreased the likelihood of a rate cut in March and has caused a shift in market expectations. Previously, there were expectations of a rate cut and 175 basis points of rate cuts priced in for this year, but now only 75 basis points are priced in. The strong economy and low inflation scenario is now seen as unlikely. The inflation report also had an impact on gold and bitcoin prices. Gold fell below ,000 and bitcoin’s climb above ,000 was halted.

US inflation opens door to March Fed rate cut

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US inflation opens door to March Fed rate cut

The US inflation, income, and spending data released on Friday were generally in line with expectations. Spending increased by 0.7%, surpassing the expected 0.5%. This suggests that the US consumer and economy are in good shape. The inflation data released alongside the spending data indicates that inflationary pressures are not increasing significantly. Oil prices remained flat after reaching a two-month high, and gold prices remained above ,000. The data supports the case for rate cuts in March, but steady prices prevent excessive optimism.