The release of the inflation data (consumer price index\/CPI) from the United States yesterday caused significant movements in the financial markets. The CPI was reported to increase by 2.7% year-on-year (YoY) in July, matching forecasts and the previous month\u2019s growth.<\/p>\n
Meanwhile, the core inflation, which excludes food and energy prices, grew by 3.1% YoY. This figure exceeded the forecast of 3% YoY and the June growth of 2.9% YoY.<\/p>\n
Inflation serves as a primary reference for the Federal Reserve in determining monetary policy. Interestingly, the rise in core inflation did not change the likelihood of a rate cut by the Fed next month. According to FedWatch, market participants estimate a 95% probability that the Fed will cut interest rates by 25 basis points to a range of 4%-4.25%.<\/p>\n
This sentiment is expected to influence market movements during trading on Wednesday.<\/p>\n
GOLD<\/strong> The precious metal is beginning to rebound, although it remains constrained by improving market risk appetite. This situation prompts investors to venture into higher-yielding risky assets, making Gold, traditionally a safe haven asset, less appealing.<\/p>\n Nonetheless, Gold continues to receive positive sentiment from the substantial chances of a Fed interest rate cut next month.<\/p>\n OIL<\/strong> Their meeting may prevent sanctions against Russia, especially in the energy sector, thereby potentially impacting oil prices during the European trading session.<\/p>\n EURUSD<\/strong> This sentiment is likely to influence EURUSD movements during the European trading session.<\/p>\n GBPUSD<\/strong> This data release indicates that the UK labor market remains robust, reinforcing the Bank of England’s (BoE) position that a rate cut is not imminent. Conversely, the Fed is expected to lower rates next month, contributing to a positive sentiment for GBPUSD.<\/p>\n USDJPY<\/strong> Nasdaq<\/strong> When rates are cut, the US economy is expected to improve, and this positive sentiment will continue to support the Nasdaq during the European trading session.<\/p>\n \u00a0<\/p>\n","protected":false},"excerpt":{"rendered":" The release of the inflation data (consumer price index\/CPI) from the United States yesterday caused significant movements in the financial markets. The CPI was reported to increase by 2.7% year-on-year (YoY) in July, matching forecasts and the previous month\u2019s growth. Meanwhile, the core inflation, which excludes food and energy prices, grew by 3.1% YoY. This […]<\/p>\n","protected":false},"author":4,"featured_media":21040,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5170,142],"tags":[5175,5174,5176,5178,5177,5168],"class_list":["post-81773","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-daily-summary","category-news","tag-cls10","tag-eurusd","tag-gbpusd","tag-nq","tag-usdjpy","tag-xauusd"],"yoast_head":"\n
Gold prices (XAUUSD) experienced a slight increase to $3,347.85 per troy ounce during trading on Tuesday, after a decline earlier in the week. Gold benefits from the strong likelihood of the Fed cutting interest rates.<\/p>\n
Oil prices (CLS10) dropped by $0.91 to $63.07 per barrel on Tuesday. Negative sentiment continues to loom, particularly regarding President Trump\u2019s upcoming meeting with Russian President Vladimir Putin this week.<\/p>\n
EURUSD rose by 572 points (57.2 pips) to 1.16707 during trading on Tuesday. The euro benefited from pressure on the US dollar after the probability of a Fed rate cut next month surged to 95%, remaining unchanged despite an increase in US core inflation.<\/p>\n
GBPUSD surged by 675 points (67.5 pips) to 1.34939 on Tuesday, nearing a three-week high. The increase followed the report of 239,000 job changes (employment change) in June, significantly higher than the forecast of 65,000, and the previous month\u2019s 134,000.<\/p>\n
The strong likelihood of a Fed rate cut next month prompted USDJPY to decline by 286 points (28.6 pips) to 147.778 on Tuesday. This sentiment regarding the rate cut is anticipated to affect USDJPY movements during the European trading session.<\/p>\n
The Nasdaq composite index surged by 320 points to 23,949 on Tuesday, and today further increased to 23,965, marking an all-time high. Overall, stock indices received positive sentiment from the great prospects of a Fed interest rate cut next month.<\/p>\n