Inflation Rises And A Big Day For Cryptocurrencies

US index futures have dropped underwater following the release of a hotter than expected US inflation numbers. Both US consumer prices (3.4% vs street 3.2% and previous 3.1%) and Core CPI (3.9% vs street 3.8% and previous 4.0%) were worse than expected weakening the case for near term interest rate cuts. US weekly initial jobless claims (202K vs street 210K) were better than expected. Combined these indicators have weakened the case for near term interest rate cuts.

On this news the US 10-year treasury note yield has moved up to 4.05% and US index futures have turned downward with the three main contracts currently down 0.1%-0.2%. Energy action is mixed this morning with US Crude Oil up 1.8% and Natural Gas down 1.75% ahead of today’s storage report. In metals action, Gold and Copper are both up about 0.25%

Cryptocurrencies are soaring on the news that the SEC has finally approved rule changes that will enable spot Bitcoin ETFs to be launched in the US. On the news, Bitcoin is up 2.5% and Ethereum is up 7.1%.

US earnings season kicks off tomorrow with results due from JPMorgan Chase, Citibank, Wells Fargo and Bank of America, followed by regional and investment banks next week. UnitedHealth, Blackrock and Delta Airlines also report tomorrow. In addition to earnings/guidance, investors may also focus on loan loss provisions and results from trading, capital markets and wealth management in what was  a particularly strong quarter for stocks and bonds.

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