US Wrap

Markets might want to start rethinking their slow melt-up after inflation in the US came out well above even the highest expectations.

YoY the latest data showed inflation sitting at 4.5%, above the 4.0% expected number. This is being led by a huge hike in WTI amongst other things and is very clearly signalling the Fed’s idea that it is ‘transitory’ is simply incorrect. In fact, many are suggesting inflation could well be in the double digits.

As a result, the Greenback surged to recent highs, while bonds got sold off. While there were other factors that propped up yields, including a soft bond auction, it’s clear that we have now likely found a floor in yields and they will surge again from this point onwards.

The Data Agenda

On the back of yesterday’s CPI, we will have some interesting events today to look out for.

We, of course, have Powell speaking and now he must address the out of control inflation. At the same time, PPI is due out and which likely tell a similar story.

In Canada today, the BOC is set to release their latest monetary policy statement and we will be looking for signs of rising rates for similar reasons.

Forex Signal Update

The FX Leaders Team hit 6 winners from 7 trades in what was a great session thanks to that jump in the USD.

XRP – Active Signal

XRP is now testing the $0.60 level and at the moment, the entire sector is weak. This triangle might be about to break down?

DOT/USD – Active Signal

DOT/USD appears to have dropped the $15 level now and we are seeing quite a bit of red in the entire selector today.

Cryptocurrency Update

BTC has been selling off all week so far and is now back looking at a test of the $32,000 level.

This is dragging the entire sector down at this stage and there are not many crypto’s in the green this morning.

We are also hearing a lot of stories of Binance blocking withdrawals in the UK, which is a concern as many payment processors have already pulled out.