US Core CPI Data Rose by 0.2% Month-on-Month, Key PPI Metric Coming Today; Canadian CPI Data Meets Expectations; Bitcoin Back Below $118,000 After Trading at Record High Above $123,000; Gold Outperforming Silver; US Stock Market Indices Sell Off After Briefly Making Record Highs; UK CPI Expected Today
Summary: For another consecutive month, US core inflation data is lower than expected, but expectations of a September rate cut by the Fed are dropping, boosting the USD.
- US CPI data yesterday was mixed: Core CPI data, which policymakers pay keen attention to, was a tick lower than expected, while CPI generally was marginally higher than expected. Major US stock market indices like the NASDAQ 100 and the S&P 500 briefly traded at new record highs following the data release but quickly slumped and either ended the day lower or only marginally higher. There will be a release today of US Purchasing Power Index (PPI) data which is seen as another key inflation metric.
- In the Forex market, the US Dollar index responded to the declining chance of a 0.25% rate cut in September (currently only a 54% chance) according to the CME FedWatch tool. This has boosted the US Dollar which has now risen for ten consecutive market days. In the wider market, since todays Tokyo open, the Australian Dollar is the strongest major currency, while the Swiss Franc is the weakest. The EUR/USD currency pair remains within a valid long-term bullish trend but yesterday traded as low as $1.1600 so any long trade here does not look very healthy right now. The European Union is considering slapping retaliatory tariffs on US imports of aircraft, vehicles, and some other goods.
- UK CPI (inflation) unexpectedly rose from 3.4% to 3.6% annualized. This has sent the British Pound a little higher as its seen as decreasing the chance of rate cuts by the Bank of England.
- Canadian CPI data came in exactly as expected yesterday.
- The digital asset Bitcoin continued to sell off yesterday after trading at a new all-time high price above $123,000. However, it seems to have found support at $116,000 and the price is rising again at the time of writing. Trend traders will have been long since at least the end of last week and will probably stil be seeing their trades in floating profit. For those finding it difficult to access Bitcoin, there are several affordable Bitcoin ETFs as well as Bitcoin micro futures (10% of a Bitcoin).
- Silver remains in a valid long-term bullish trend, but notably, Gold has finally started to outperform Silver and is currently rising more firmly. Gold is not very far from its record high price at $3,500 per ounce.
- Copper remains bullish. Many trend traders will be long of Copper due to last week’s huge rise to a new all-time high following Trump’s announcement that all copper imports would be subject to a tariff of 50%.
- The lesser-known precious metal Palladium is showing relatively bullish price action and continues to break to new long-term high prices, attracting the interest of trend traders. Palladium futures are expensive, but there is an affordable physical Palladium ETF.
