[U.S. Market]Stocks Rebound, CPI Slows and Risk Appetite – Dollar Near 133 Yen – Bloomberg

The US stock market rebounded on the 10th. The U.S. consumer price index (CPI) growth slowed more than expected, fueling speculation that the Fed would turn to relatively modest rate hikes. But market watchers say the authorities still have a long way to go to reach their goals.

The dollar/yen exchange rate plummeted to just around 133 yen. At one point, it dropped to just around 132 yen.

As a movement of risk appetite, the S & P 500 stock index rose 2.1% from the previous day to 4210.24, a three-month high. The Dow Jones Industrial Average rose $535.10, or 1.6%, to $33,309.51. The Nasdaq Composite Index rose 2.9%.

The Nasdaq Composite and the Nasdaq 100 are both up more than 20% from their June lows on the back of a rally in tech stocks, which is by definition a bull market. The Chicago Board Options Exchange’s (CBOE) volatility index (VIX) fell below 20, its lowest level since April.

July’s CPI fell short of market expectations for both the core and composite indexes.

US CPI decelerates more than expected, falling energy prices – rate hike pressure eased (3)

“All in all, it’s good news for risk assets,” said Florian Hierpo, head of macro research at Lombard Odier Asset Management. However, “a slowdown in price growth does not mean the end of inflation, nor does it mean the end of hawkish monetary policy. We are still in a situation that requires action by the authorities.”

In the US Treasury market, the two-year bond yield narrowed the decline. As of 4:18 p.m. New York time, the yield on the 2018 bond fell five basis points to 3.22%. Immediately after the CPI announcement, there was also a scene where it was lowered by 20bp. The 10-year yield rose 1 basis point to 2.79%. It was down 11bp at one point.

The dollar index fell in the foreign exchange market. Reacted to the US CPI. The dollar has weakened across the board against the 10 major currencies.

As of 4:19 pm New York time, the dollar fell 1.6% against the yen to ¥132.90. There was also a scene where the price dropped to 132.03 sen at one point. Before the CPI was announced, it was hovering around ¥134.90.

The Bloomberg Dollar Spot Index, which tracks the dollar’s movements against 10 major currencies, fell 1%. At one point, it fell 1.4%, the sharpest drop since March 2020, when the shock of the new coronavirus hit the market. The euro rose 0.9% against the dollar to $1.0302 per euro.

Crude oil futures in New York rebounded. It closed at a one-week high after CPI data suggested a slowdown in inflation and a weaker dollar.

US weekly data released on the same day also showed gasoline inventories were below the 10-year average for this time of year, while demand for gasoline increased.

West Texas Intermediate (WTI) futures for September delivery on the New York Mercantile Exchange (NYMEX) rose $1.43, or 1.6%, to $91.93 a barrel. London ICE North Sea Brent October delivery rose $1.09 to close at $97.40.

The New York gold futures market rose slightly for three days in a row. The U.S. CPI data eased some of the pressure on the Fed to raise interest rates more aggressively, and the dollar weakened.