🎲Shinning starts on Nasdaq💎

The latest CPI data showing inflation weakening boosts high hopes for the Fed to moderate its interest rate hikes. This is sufficient to send the Nasdaq to its 5th day of green. The CPI’s latest reading of 6.5% on a yearly basis is a drop from its peak of 9% during the middle of 2022. 

Despite the welcoming data, Pika World continued to be cautious as many Fed members have articulated that the current inflation rate remained uncomfortably high, and investors may have pinned too much optimism on the pace at which such elevated inflation will fall off. 

📊Bond markets signalling a possible end to rate hike🎯

On the flip side, we are seeing the bond market signalling the possible end to the rate hike cycle. For example, the 2-year Treasury yield, often seen as a guide of the Federal Funds Rate, dropped to around 4.12% from 4.2% after the data release. Likewise, the 10-year yield fell to 3.425% from 3.55%. 

There is a growing expectation that the Feb FOMC meeting will see Uncle Powell raising the interest rate by 0.25% instead of 0.5% and possibly pausing rate hikes further. 

Nonetheless, Fed President Bullard, contrary to his name, voiced hawkishness and raised the idea of the fund rate hitting 5%, which is an uncomfortable level. His comments were sufficient to send the Nasdaq at one point, evaporating all gains before the index swang back into green territory. 

📮What are our dishes today? 📖

At 11 pm, we will have the Michigan Consumer Sentiment for Jan. Usually; this data is not of great significance. However, recently, there has been growing attention given to it due to the worry about a hard economic landing. After all, a significant component of the US economy depends on consumer spending. 

It is 13 Jan, Friday, at 9 am in Singapore and 9 pm in New York. A roller coaster but a green week thus far, Pika World wishes everyone a splendid and safe trading day ahead.