🥃A green day ahead of CPI data💰

The equity market rose on Monday as it tried to put away the past week’s losses and start the week with a firm footing. However, the optimism before CPI data is dangerous as it built a lot of expectations ahead of the data release.

As we have seen, the strong showing in Nasdaq this week is built on the foundation that inflation is moderating consistently. This helps to alleviate the worry of the aggressive rate hike that had to dominate traders’ minds in 2022. 

Nonetheless, we are mindful of being cautious ahead of the data. 

🧸Increasing number of news signalling worsening inflation🎯

While the CPI data can be anyone’s guess, more news reports are portraying that the inflation reading could be ugly; indeed, if there is a U-turn in the reading, showing any form of an uptick in inflation, the animal spirit of short-selling could scale up, unleashing massive downward dive of major index. 

We are still seeing stubborn stickiness in food prices. Likewise, gasoline prices have gone up in January. All these point to some worries. We could not escape from our long position and will be riding through this volatile period,

📮What are our dishes today? 📖

At 9.30 pm, the long waited for CPI data for (MoM) is expected to accelerate from 0.1% to 0.5%. 

On a YoY basis, we expect it to fall from 6.4% to 6.2%. 

After which, 12.30 am will see, FOMC Member Harker will speak, and at 3.05 am, FOMC member William will also deliver a speech. 

Given the CPI release and FOMC members’ speeches, expect a constant swing in the market.