© Reuters
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Investing.com – Positive expectations dominated the inflation data released earlier, which following positivity pushed the dollar index lower before its release and risky stocks and assets to the upside as investors thought its positivity would have prompted the Fed to ease policy.
Contrary to expectations, the data showed negative results and indicated strong inflation
Here is the result of the data:
Inflation data …
Year-on-year CPI rose 8.3% in August, while experts predicted a slowdown in the increase to 8.1% and Credit Suisse experts predict a 7.9% increase, down from to the 8.5% increase in the previous July reading.
As for the month of August, the core CPI was up 0.1%, while experts were expecting a drop of -0.1%.
The core consumer price index grew 6.3% yoy for August, while experts predict a 6.1% rise, up from 5.9% in July, due to of rising house prices.
Conversely, it increased by 0.6%, while experts had expected a 0.3% increase, equal to its increase since July.
data
Real income figures fell 0.1% and in the previous July reading increased 0.8% after the revision.
Market reaction predictions
This data pushes the Fed to move forward with its aggressive policy and may need to continue it for a longer time, which benefits the dollar and damages high-risk assets such as stocks and cryptocurrencies.
As for gold, on the one hand, it will weaken with the strength of the dollar, but the continuation of inflation and monetary policy could cause an economic recession, which could increase its shares in the future.
The CME tool, which tracks the Fed interest rate, indicates a 12% probability that the Fed will raise rates by 100 basis points. While the majority of 88% aim to raise interest rates by 75 basis points.
Markets Now – After the Data
The dollar index rose after disastrous inflationary data that saw the consolidation of high inflation against policies, to the dollar index at 108,780, up by 0.63% after reducing losses which stood at 0.5%.
Meanwhile, the euro immediately fell 0.66% to 1.0050 and is close to breaking below the parity line.
On the other hand, it fell more than 1.14% to 1721.40 for futures contracts, and fell 0.8% for spot contracts to $ 1710.69 an ounce.
Silver fell 1.14% to $ 19,585 an ounce.
As for the US market, the major indices recorded a slump in pre-opening trading, with the Dow Jones down by a full point, the S&P down 1.4%, while futures contracts fell by 1. , 95% and are close to losing 2%.
As for Bitcoin, the increase lost 1.7% and shrank by more than 3%, to now record $ 2,166.3 per symbol, and Ethereum’s losses increased 3.74%, per register $ 1680.77 per symbol.
Markets before data release
coins
It now stands at 107.59 against a basket of FX, down 0.46%.
The dollar pair is now posting £ 18.24 per dollar, while the pound is posting £ 19.3610 per dollar.
At that time, it increases by 0.51% to cross the parity line at 1.0173.
goods
Gold was up 0.37% to $ 1731 per spot, while it was up just 0.14%, after rising more than 5% yesterday and now recording $ 19,892 an ounce.
It rises 1.53% to $ 89.13 a barrel, while it rises 1.4% to $ 95.32 a barrel.
As for it, it rises by 1.24% to $ 22,628 per symbol, while the rest of the altcoins are down.
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