Key Inflation Data Takes Center Stage as Markets Await U.S. and U.K. Figures

Good morning, and welcome to an eventful Wednesday! Today is shaping up to be a critical day for the markets, with the U.S. inflation report taking center stage. After yesterday’s lower-than-expected producer inflation data, which put pressure on the U.S. dollar, traders are eagerly awaiting today’s consumer inflation numbers. The market is anticipating a 0.2% increase month-over-month and a 3% annual rate. Alongside this, we’ll also be keeping an eye on the U.K.’s inflation data, where an increase to 2.3% is expected from the previous 2%.

In a surprising twist earlier today, the Reserve Bank of New Zealand cut interest rates by 25 basis points, lowering the rate to 5.25% when most were expecting it to remain at 5.5%. This unexpected move was justified by the bank’s observation that inflation is gradually returning to its target range of 1-3%. The NZD dropped on the news. The Canadian and Australian dollars are also facing downward pressure, with the Aussie feeling the effects of its close ties to the Kiwi. Meanwhile, the Japanese Yen is showing signs of life, attempting a recovery after several days of losses.

On the commodities front, oil is trying to bounce back after a steep decline yesterday, which occurred just as it hit a key resistance level. Despite today’s attempts to push higher, yesterday’s drop might have set the stage for a broader sell-off. Precious metals are also starting the day on a softer note, with their movements likely to be influenced by how the U.S. dollar reacts post-inflation data. In the world of equities, Tuesday was a stellar day for the indices, with most posting solid gains. European indices are still in a bullish correction phase, but the Nasdaq has broken out, signaling what looks like the beginning of a new bullish trend rather than just a correction.

Lastly, as we look ahead to earnings, Home Depot impressed with better-than-expected results yesterday. Today, the focus shifts to Cisco, which will report its earnings after the market closes. With all these developments, it’s clear that today could be a pivotal day for market direction. Stay tuned!

Source: https://www.axiory.com/analytics/market-news/key-inflation-data-takes-center-stage-as-markets-a