US CPI data will be released today and is widely expected to show a decline in the annualised rate of inflation.
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There will be a release today of US CPI (inflation) data. It is expected this will show no change in the month-on-month rate (an increase of 0.2%) which will indicate a reduced annualised rate from 4.2% to 3.8%. If there is a surprise to the downside, expect US stocks to rise and the US Dollar to fall. If there is a surprise to the upside, expect vice versa.
The USA / Iran confrontation has continued to escalate, with the USA bombing Iran for another night after Iran fired on ships in the Strait of Hormuz and on several Gulf nations. I have been writing here for a while that the US administration's pursuit of a "good deal" with the regime in Iran will never yield fruit and is incompetence and wishful thinking taken to an infinite level. Unfortunately, I am being proven right. The Strait of Hormuz is effectively 99% closed, with just a tiny trickly of crude oil shipping getting through, or any shipping for that matter. The potentially inflationary impact of this, if the situation continues, is leading to firmer US yields and a stronger US Dollar. We are also seeing spot WTI Crude Oil trading over 4% higher today to reach a level above $80 - I said two days ago that WTI could be a good buy today after finding support at the former pre-war resistance level of $67.11.
The USD/JPY currency pair is looking a little firmer but is still basically consolidating within an area of high volatility not far from its multi-decade high price. The US Dollar Index is higher today, but not by much, and is still some way from the key resistance level at 101.39, which has prevented a more meaningful bullish breakout. Forex markets have had a very active Asian session, with the New Zealand Dollar the strongest major currency on the day, while the Japanese Yen has been the weakest, putting the NZD/JPY currency cross in focus today.
Equities are mixed to lower over the past 24 hours, although several major indices have been moving higher in recent hours. In the USA, the S&P 500 Index has been recently looking stronger than the NASDAQ 100 Index, which is an interesting indication of a rotation out of tech / AI stocks.
Precious metals such as Silver and Gold are rising a little but are still clearly in strong bearish trends and near multi-month lows. Gold, notably, is still being held by a long-term descending trend line which currently sits at about $4,200. I do not short commodities, but if I did, I would be short of these two precious metals.
Bitcoin looks like it might be finding support, so the next leg might be a move higher to retest the key resistance level at $65,000. If the price breaks down below the $60,000 today that will be a very bearish sign..