Gains on Wall Street, focus on January inflation data

“Part of the weakness over the past week may also be due to the caution ahead of the US CPI report. tomorrow, how good might be harder than expected. One of the main reasons we’ve seen the US dollar fall sharply from those 22-year highs in October is the near-universal belief that US inflation has peaked. While this may be true, it certainly does not imply Inflation will fall as quickly as it has risen.“, says Michael Hewson, chief market analyst at CMC Markets.

The website comments “hawksboth of the President of the Federal Reserve (Fed), Jerome Powellfrom other officials Central bank officials reiterated that rates will continue to rise, and for longer than some expect, until they reach the threshold. sufficiently restrictiveThe ‘enough restrictive’ policy has also weighed on investor sentiment, with some already betting that US rates could peak at 6%..

On the geopolitical scene, the tensions between China and the United States after the The US military shot down a fourth unidentified object in its airspace on Sunday. which was at high altitude, although authorities are confident in their ability to recover the wreckage. This follows shootings that have taken place since Friday and throughout the weekend, about which the government has not yet provided details. beijing said American balloons flew over China at least 10 times last year.

WAITING FOR THE ICC

The website Inflation in January in the United States is the most important macroeconomic data of the week and, without a doubt, will mark the future of the market.

The consensus envisages a reduction in the general rate year-on-year, at 6.2% compared to 6.5% in December, and another in the core inflation at 5.5%, compared to 5.7% in December. However, inflation would increase month on month..

“We believe that Underlying inflationary pressures accelerated in January.as services inflation remained solid and goods inflation returned to positive territory. We expect headline CPI to rise 0.5% m/m. (+6.2% compared to the previous year), while the underlying CPI would increase by 0.4% month on month. (5.5% year-on-year)”, anticipate Barclays experts.

In this sense, Naeem Aslam, of AvaTrade, indicates that “if the reading of inflation shows a new improvement and falls even lower than the previous one, then it would be the best news for investors and is very likely to bring more bulls to market. However, if the reading starts to take a 180 degree turn. and shows an upturn, we could easily see a panic among tradersas they are more than likely anticipating much more belligerent Fed policy. In these scenarios, it would even be wrong to think that the final interest rate is close to the current projection of 5% to 5.25%.“.

There is also little sign of a slowdown in services inflation. and, given that all central banks have a 2% inflation target, “it is highly unlikely that central banks will consider cutting rates at a time when prices are well above that number,” notes Hewson. .

“As we enter a new week, the main focus will be on tomorrow’s CPI report, as well as retail sales, which will be released on Wednesday. Better than expected numbers are unlikely to be positive in the context of the proximity of a peak for US rates”, underlines the expert from CMC Markets.

CORPORATE AND OTHER MARKETS

At the company level, Metathe parent company of Facebook, Instagram and Whatsapp, is planning a new round of layoffswhich could come into effect in March, while the company already made cuts in November last year. 11,000 jobs. According to Financial Times employees, the company is currently reviews upcoming staff assignments and workloads..

Although Meta has made no statement on the subject, at the beginning of February Zuckerberg announced that he would continue to control his costs. under its new mantra of “the year of efficiency”.

The website Manchester United is also in the limelight after “Bloomberg” revealed that Qatar consider making a bid for the English club. The publication reports that representatives of Qatar’s sovereign wealth fund, Qatar Investment Authority, are working on Doha’s preliminary offer, while New York-based bank Raine Group is advising the Glazer family, the current owners of the Red Devils.

In other markets, oil West Texas is down 0.77% ($79.11) and the Brent is down 0.73% ($85.81). On the other hand, the euro appreciated by 0.15% ($1.0691), and the ounce of gold lost 0.32% ($1.868). Furthermore, the U.S. 10-Year Bond Yield rises to 3.736% and the bitcoin is down 1.64% ($21,626).