US Wrap

Markets continued to melt up on Monday as the focus now turns towards the latest CPI print out of the US.

Once again the NASDAQ and SPX claimed record high levels as the grind up shows no sign of stopping just yet. However, with inflation fears ahead things could be subject to change in the days ahead. We are also getting into earnings seasons and that could be a reason for volatility to increase in the days and weeks ahead.

Notably, the USD remained weaker yesterday, while bond yields continue to press higher ahead of a couple of key economic data points.

The Data Agenda

Today we get the latest CPI data out of the US and there is every chance we could see a very high print. The expectation is that YoY inflation is now at 4%, while monthly it is sitting at 0.4%, which is even higher than the annual rate. 

This also includes the fact that inflation is grossly underestimated as there are many things that are tied to CPI that require low readings.

Interestingly, we are also going to be hearing from Jerome Powell in the coming days and if inflation jumps sharply, he might well signal a change in thinking by the FOMC.

For me, inflation blowing out is not a matter of if, it’s just a matter of high it runs. I fully expect bonds yields to push higher preemptively.

Forex Signal Update

The FX Leaders Team had a busy session with two wins from three trades while we still have six signals currently open.

XRP – Active Signal

XRP has been sitting above the $0.60 level and while we keep hearing positive things, the market cannot lift at the moment.

DOT/USD – Active Signal

DOT/USD is on the wrong side of the $15 level at the moment and price will need to reclaim that level quickly.

Cryptocurrency Update

BTC got hit yesterday as it tried to push towards the $35,000 level, as the sellers struck and ultimately saw price fall under the $33,000 mark.

We continue to hear more stories about payment processors pulling out of Binance, which is the world’s largest exchange. This in conjunction with the worries around Tether’s asset backing are the main headlines of note at the moment.