Morning Minutes

Stocks Soar, US Dollar Drops as Inflation Pressures Ease




US index futures have gone into rally mode after today’s US Consumer Price Index report indicated easing inflation pressures. Both headline CPI (7.7% vs street 8.0% and previous 8.2%) and core CPI (6.3% vs street 6.5% and previous 6.6%) declined more than expected.

Currently, NASDAQ futures are up 3.4%, S&P futures are up 2.7% and Dow futures are up 2.3%, having rallied on the inflation news. European markets are also climbing today with the Dax up 1.3% and the FTSE up 0.9%.

The US 10-year treasury note yield has dropped from near 4.1% toward 3.9% indicating that investors see the improved inflation number as pressure on the Fed to remain hawkish. The US Dollar has also turned sharply southward this morning enabling Gold to gain 1.3%, the Canadian Dollar to rise 1.2%, the Euro to rally 1.4% and the Pound to soar 2.4%. Commodities are also staging a positive intraday reversal with WTI crude oil now up 1.2%, natural gas up 2.6% and copper up 1.5%.  

In other news, weekly US initial jobless claims were slightly worse than expected (225K vs street 220K). The rest of the week is quiet for business news, both in terms of economic data and corporate earnings, although the crisis at cryptocurrency exchange FTX may continue to impact trading in some markets.

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Colin Cieszynski, Chief Market Strategist

Colin Cieszynski, CFA, CMT
Chief Market Strategist
+1 (647) 282-4428

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