NY FED Projecting Lower CPI for Tomorrow

Tomorrow the headline CPI is expected to slow in the US while core CPI is expected to move higher, but today's NY FED saw lower inflation

Skerdian Meta•Monday, June 12, 2023•2 min read

Today we are seeing an increase in the demand for the US dollar, possibly driven by investments flowing into the technology sector. However, the bond market is relatively quiet today, as US yields went through a slight dip only to reverse back up again later. There seems to be a repositioning of funds in financial markets in anticipation of an eventful week on the economic calendar. Tomorrow’s focus will be on the US Consumer Price Index (CPI), followed by the Federal Open Market Committee (FOMC) meeting on Wednesday evening, and retail sales data on Thursday.

There is a growing sentiment that the economy is stronger than initially expected, and inflation is proving to be more persistent. This could potentially reignite the debate on whether the Federal Reserve should consider raising the Fed funds rate by 6%.

Another perspective suggests that weather conditions could contribute to higher inflation. According to Deutsche Bank, the US Climate Prediction Center predicts a 56% likelihood of a strong El Niño occurring between November and January. It seems that market participants are closely monitoring these upcoming events and developments to gauge their potential impact on the economy, inflation, and monetary policy decisions.

Gold 15 Minute Chart – The 20 SMA Stopped the Retrace

The retrace higher is complete

Gold was slightly bullish earlier today, but we saw a market run for the USD at the start of the US session and XAU/USD tumbled more than $15 lower, below $1,950. We had a long erm sell Gold signal which closed in profit and we decided to open another sell signal after the retreace higher. The 20 SMA (gray) stopped the climb and the doji provided a sell signal, so we decided to go short again in Gold.

NY FED CPI Inflation Survey

One-year ahead expected inflation at 4.1% vs 4.4% in April
Lowest one-year inflation reading since May 2021
Three-year inflation 3% vs 2.9% prior
Five year inflation 2.7% vs 2.6% prior
Perceptions of access to credit declined in May

The survey showed consumers projected lower future rent, food and medical care costs.

Gold XAU Live Chart

GOLD

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Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.