Equity markets rose aggressively with the CPI turning soft as the 7.7% is much lower than the 8% estimates by economists. The core inflation removed food and energy prices (often the volatile component), moderate to 6.3% from 6.6%.
It is a pleasant and surprising report for investors, reflecting evidence of inflation peaking.
🎲Yield and the Dollar💸
Not surprisingly, Yield turned lower, and the dollar weakened; this helped to give support to the equity market. It will be good news for MNCs, which tend to report better earnings when dollar strength is weak.
Pika World continues to take some profits off the table for trading positions as we await more clues on the weakening of the labour market further to push the Fed towards a less aggressive hike regime.
🧮Meeting of the Titans🎯
On Monday, President Biden is set to meet President Xi during the Group of 20 summits in Bali, Indonesia. It will be the first time they had a face-to-face meeting since President Biden won the presidential election and President Xi marched into his third term.
On top of the list in discussion is likely the Ukraine war, North Korea’s recent missile launches and global issues, including climate change. Investors are keenly looking for some signs of thawing relationships.
Efforts to promote deeper communication will be welcomed. Competition is unavoidable, and managing them will be the path forward. Finding common interests will be beneficial for the international community.
Pika World will be monitoring the updates of the meeting progress.
📮What’s on the menu today?📖
At 11 pm, we will have the Michigan Consumer Sentiment data for Nov, which we expect to moderate slightly to 59.5 from 59.9. It will still be a good sign.
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