The main US stock index, the S&P 500, hit a new all-time high yesterday and still looks bullish ahead of US inflation data.
➡️ The S&P 500 Index rose yesterday to reach a new all-time high above 5,800. This is bullish behavior ahead of today's crucial US inflation data, which is expected to show an annualized rate declining from 2.5% to 2.3%. If the fall is stronger, we can expect stock markets and riskier currencies to rise strongly. If the fall is weaker than expected or we even see no change or a rate increase, we can expect a sharp decline in stock markets and a big boost to the US dollar.
➡️The minutes of the latest US FOMC meeting were released yesterday. They showed that a substantial minority wanted to cut rates by only 0.25%, but were outvoted by participants who thought the US economy was weaker than the subsequent jobs and average earnings data showed. This suggests that we will see a more aggressive approach to rate cuts at the next Fed meeting in November. CME's FedWatch tool still suggests that 86% expects a rate cut of 0.25% at the next Fed meeting.
➡️ Sentiment continues to be hawkish on the US dollar following last Friday's trigger event, when significantly stronger-than-expected US jobs and average earnings data were released. The US Dollar Index (DXY) is now trading well above the previous key resistance level at 102.25. This is a bullish signal for the greenback.
➡️ Since Tokyo opened today, the strongest major currency has been the New Zealand dollar, while the weakest has been the Japanese yen.
➡️ Gold It was sold off further after hitting a new all-time high a few days ago. If it closes below $2.570 most trend followers will give up on this long trade,
➡️ U.S. Consumer Price Index (CPI) (inflation) data will be released later today.
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