SSPY - Will USD Be Bought After Being Sold On Expectations Of A Softer CPI?
2024-05-15 08:35:00 ET
Summary
- The dollar is trading weakly against G10 currencies and emerging market currencies as the market expects softer US CPI and retail sales data.
- US interest rates are softer, with Treasury yields at their lowest level since April 10.
- Equities are mostly higher, with European stocks extending their advance for the ninth consecutive session.
Overview
The dollar is trading heavily against the G10 currencies and most of the currencies from emerging markets. The market expects softer US CPI (and retail sales) today. Any decline in the year-over-year core rate would put it at its lowest level since April 2021. Still, this has been anticipated, and the market seems vulnerable to "sell the rumor, buy the fact" type of activity. After all, the Fed will see another employment and CPI report before the June 12 meeting. Moreover, comments by Fed officials have encouraged the market to push out the first cut to September (~85%) and about an 80% chance of a second cut before the end of the year. Of course, the dollar would likely rally on an unexpected increase in CPI too....
Will USD Be Bought After Being Sold On Expectations Of A Softer CPI?