The Market’s Moment of Truth: Inflation

As dawn breaks on this pivotal Wednesday, all eyes are keenly fixed on one data point: the much-anticipated inflation figures from the US. With a projected monthly spike to 0.6% and an expected annual leap to 3.6% from the previously recorded 3.2%, these numbers could serve as the catalyst for significant market moves. But before those figures dominate the trading screens, there’s another important piece to consider: the UK’s GDP. Forecasts suggest a decline of 0.2%, setting the tone for an interesting trading day.

Yesterday’s dip in the indexes has sounded a few alarm bells. The DAX hovers dangerously near the 15500-point mark, a crucial support threshold. A breach here would undoubtedly send bearish ripples across the market. The NASDAQ finds itself teetering on its mid-term uptrend line, while the Dow Jones, having recently recoiled from its mid-term downtrend line, is now inching towards a long-term uptrend threshold. There’s a palpable tension in the air, and the impending inflation data might just be the key that unlocks the market’s direction. Until then, we’re left in suspense, waiting for clarity.

Diving into the forex scene, yesterday was marked by the strength of the Canadian dollar, Euro, and American dollar. The Japanese Yen and New Zealand Dollar, on the other hand, lagged. Today’s early hours have seen the Australian Dollar and Japanese Yen struggling, while the British Pound is emerging as a powerhouse.

Shifting our gaze to commodities, we’re witnessing a divergence in trends. Precious metals, notably gold, are on a downward trajectory, with the gleaming metal inching towards the psychological barrier of $1900. In stark contrast, the oil market is buoyant. WTI oil, having successfully broken free from its ascending triangle pattern, now has its sights set on $93 per barrel. Brent, not to be outdone, is riding a wave of positivity, with market whispers suggesting a potential surge to the much-vaunted $100-per-barrel landmark.

Source: https://www.axiory.com/analytics/market-news/the-market-s-moment-of-truth-inflation