Moderate gains on Wall Street after expected drop in US CPI

THE UNITED STATES ICC

The data for US CPI has attracted the attention of investors and agencies around the world, especially a The Federal Reserve (Fed) which needs signs that its monetary tightening policy is working. in its objective of bringing inflation back to the 2% target. The latest data show that the CPI is moving in the expected direction, posting its sixth consecutive year-on-year decline.after peaking at 9.1% in June.

In December, the tThe monthly rate contracted by 0.1%.mainly due to lower energy prices, while year-on-year it fell from 7.1% in November to 6.5%.

For Naeem Aslamchief market analyst at AvaTrade, “US inflation is in line with expectations. This is good news, however, Market participants were expecting the figure to improve a bit more. and that brought the bullish dollar bets back into the market.”

“However, whatever the criterion used, this figure is much better than the previous one and inflation is moving in the right direction.which should keep some pressure on the Fed,” he added.

John Leiperinvestment director of Titan Asset Management, believes that this figure “is good news and marks the beginning of a new era for Europe”. sixth consecutive decline in annual inflation since the peak in June 2022.“.

However, he adds that “the direction taken is good news but of an insufficient magnitude to deflect the Fed and Jerome Powell from their hawkish stance.“.

“It’s interesting because market prices imply a Tiny 30% chance the Fed will hike more than a quarter point at its February meeting.. This runs counter to comments from Fed committee members regarding the anticipated weight of the remaining rate hikes and indications that the final rate may well be set above 5%,” he said. .

HARKER BETS ON 25 BP RISE

The website Philadelphia Federal Reserve Chairman Patrick Harkersaid Thursday that, in his view, The Fed’s 75 basis point interest rate hikes are over, he said.and considers that from now on, 25 basis points will be “appropriate”, to achieve a level of monetary tightening that will be “sufficiently restrictive” at some point this year in order to bring inflation back towards the target of 2%.

“I expect that I expect us to raise rates a few more times this year, althoughIn my opinion, the days of raising them 75 basis points at a time are certainly over. In my opinion, increases of 25 basis points will be appropriate going forward,” Mr. Harker said in a speech in Malvern, Pennsylvania.

LABOR MARKET

This Thursday also saw the publication of the unemployment benefit claims for the week ending January 7which recorded an increase of down to 205,000 from 206,000 the previous week.a figure that has been revised upwards from the 204,000 originally published. Nevertheless, this figure is lower than the consensus forecast, which expected an increase to 215,000.

The analysts of Oxford Economics point out that “the low level of new applications is a reminder that employers in general are not laying off large numbers of workers yet“.

“Generally, claims data is consistent with a Labor market and wage pressures are still too weak for the Fed. and leave it on course for another rate hike in 2023. Our forecast assumes a further increase of 25 basis points, which will take place at the February 1 meeting.but we consider that the risks are tilted towards additional rate hikes, ”they add.

On the business side, disney appointed as president Mark Parker as he prepares for battle with Nelson Peltzafter refusing to allow the activist investor to join its board.

TECHNICAL ANALYSIS AND OTHER MARKETS

The website S&P500 “started the year giving a sign of strength in its series of prices, which makes us optimistic about its evolution in the coming weeks”, explains César Nuez, analyst at Bolsamanía.

“The selective has succeeded in crossing the resistance at 3,889 points. after a few weeks of lateral movement. This makes us think of an upcoming attack of the key resistance of 4,100 points. Its performance at these levels is essential,” adds this expert.

“If he manages to overcome them, it is very likely that we could see an increase in the number of jobs. trend change which could lead to an attack at the level of the 4,300 stitches. All of this would be reversed with the abandonment of support at 3,764 points, the lows of last December,” concludes Nuez.

In other markets, oil West Texas is up 1.95% ($78.92) and the Brent is up 1.96% ($84.29). On the other hand, the euro appreciated by 0.42% ($1.0799) and the ounce of gold is up 0.90% ($1,895). Furthermore, the performance of the US 10-year bond at 3.524% and the bitcoin rebounded 3.09% ($18,077).