Markets Expecting US Inflation to Fall to 3.1%

Markets are keenly awaiting the release later today of US CPI (inflation) data, which is expected to show a month-on-month increase of 0.3% and an annualized rate of only 3.1%.

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  1. The USA will be releasing its CPI (inflation) data today. The data is expected to show a monthly inflation of 0.3% and a strongly dropping annualized rate of 3.1%, following last month’s strong fall. An unexpected rise of a much smaller drop could boost the value of the USD, but if the data is as expected, the USD will most likely continue to decline.
  2. The Bank of Canada will be holding a policy meeting today and is expected to raise its interest rate by 0.25% to 5.00%.
  3. The Reserve Bank of New Zealand left its Official Rate unchanged, as had been widely affected. The NZD barely reacted to the Bank’s policy meeting.
  4. In the Forex market, the spotlight is on the USD/JPY currency pair as the Japanese Yen continues its multi-day streak of getting stronger, with the Yen the strongest major currency so far today and the US Dollar the weakest. USD/JPY is now trading well below ¥140 which calls into suggests that the former long-term bullish trend is over, as the price has now made what looks like more than just a bearish retracement. Feelings are growing that the Yen has reached a major turning point as the Bank of Japan begins to inch away from its former ultra-loose monetary policy.
  5. The GBP/USD currency pair is also in focus, as it continues to break to new long-term highs and exhibit bullish momentum. GBP/USD is now trading at a 15-month high close to $1.2970.
  6. Bitcoin remains below what seems to be a very pivotal round number at $31k, with the price action now looking more uncertain, suggesting that a bullish breakout may not be likely.
  7. Equity markets are mixed, but the Hang Seng Index is up by more than 1% on the day so far.
  8. UK unemployment claims data released yesterday came in very slightly higher than expected.
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