[Mercato USA]Stocks rebound, watch out for CPI and FOMC-weak yen, 137 yen high – Bloomberg

The US stock market rebounded on the 12th. Financial markets are paying attention to the consumer price index (CPI) released on the 13th.

The S&P 500 stock index rose 1.4%, the most in about two weeks. The Nasdaq 100 index, dominated by big tech stocks, also rose.

US inflation expectations one year ahead of schedule, lowest since August 2021, New York Fed survey

Tomorrow’s November US CPI report should show that inflation continues to slow, although it is still elevated. JPMorgan Chase & Co.’s sales and trading desk said the S&P 500 could rise as much as 10% in a best-case scenario if the CPI slows. However, the probability of this actually happening is about 5%. On November 10, when the October CPI was announced, the S&P 500 species will have data remaining as on the day of the CPI announcement.The best since 2003Was.

A slowdown in the CPI would justify a 0.5 point rate hike at this week’s Federal Open Market Committee (FOMC) meeting and give markets clues that they can expect a rate cut at the end of 2023. That’s all. . The FOMC will announce its policy decisions on the 14th.

“It’s only when the CPI data comes out that it moves,” said John McClain, portfolio manager at Brandywine Global. No. It will be a longer cycle than 2020.”

“We must remain optimistic about the outlook, as it has just returned to the level it was before the steepest decline late Friday,” said Steve Sosnick, chief strategist at Interactive Brokers. “The S&P 500 is above its 100-day moving average again. We don’t see any selling pressure below that level. There is some optimism about the CPI. “Since we’ve survived, many people seem to think the CPI could survive regardless of the outcome.”

After the FOMC, the ECB will announce a policy decision on the 15th. Many also expect the ECB to decide to raise interest rates by 0.5 points. Further policy decisions will be announced this week by the Bank of England and the central banks of Mexico, Norway, the Philippines, Switzerland and Taiwan.

US treasures

US Treasuries continue to fall. He got up in the morning, but went down. Weak demand for 10-year bond auctions on Monday highlighted the risks associated with CPI and FOMC policy decisions. Yields increased across all maturities, particularly on two-year bonds.

foreign currency

The dollar index rises in the foreign exchange market. Ahead of the CPI and FOMC meetings, big business has been suspended. The dollar is almost all the way up against the 10 major currencies. Meanwhile, the yen was the worst performing of the major currencies. The dollar traded against the yen in the high range of 137 yen.

“It’s going to be a fateful week,” Barclays analysts said in a report. The CPI and subsequent central bank policy decisions “would likely be the last major chunk of the year, either strengthening or weakening the soft landing scenario into which markets appear to price in,” he said.

“The risk environment remains volatile,” Wynn Singh, global head of currency strategy at Brown Brothers Harriman, said in a statement. “We see upside risks in the CPI data and the dollar could have room to rise,” he said.

raw

New York crude futures rebounded for the first time in seven trading days. With major pipelines in North America shut down with no prospect of reopening, there has been a move to buy crude oil at this year’s low levels.

Energy infrastructure firm TC Energy continues to work to restore the Keystone Pipeline that connects Canadian oil fields to refineries on the US Gulf Coast. A reopening date has yet to be determined, according to a statement on Wednesday.

Recent weakness in crude oil prices has occasionally led to higher-than-neighbor forward spreads in both North Sea Brent and West Texas Intermediate (WTI) futures. This bear market structure suggests that oil supplies will be plentiful in the near term. Francisco Branch, head of commodity and derivatives research at Bank of America (BofA), said in an interview with Bloomberg Television that Russia’s crude oil exports have been able to export without expected market disruption.

West Texas Intermediate (WTI) futures contract on the New York Mercantile Exchange (NYMEX) for January closed at $73.17 a barrel, up $2.15 or 3 percent from the prior trading day. February delivery of London ICE North Sea Brent is up $1.89 to $77.99.

Money

The New York gold market has fallen. Expect key US inflation data this week and central bank policy decisions in major countries and regions such as the US.

Ed Moya, senior market analyst at Oanda, said traders “are waiting for the all-important inflation data, which will lead to a slight upward revision to the Fed’s dot plot. Gold traders are unlikely to change their positions well ahead of the release of inflation data and some expect a slight slowdown in core CPI”.

Gold futures for February delivery on the New York Mercantile Exchange (COMEX) fell $18.40, or 1%, to close at $1,792.30 an ounce. The spot price of gold fell 1% to $1,780.26 as of 2:53 p.m. New York time.