Marketwatch North America

Daily Insights
January 11, 2024

Today’s CPI data shows that inflation at the consumer level increased during December. CPI was +0.3% MoM and +3.4% YoY. And Core CPI (basket of consumer goods excluding food and energy) was +0.3% MoM and +3.9% YoY. December CPI results either matched or exceeded estimates, unwelcome news for the Fed and its effort to bring inflation down to a 2% long-term average.

The dollar index is higher following the CPI data, +0.29% at 102.66 after trading as low as 102.15 overnight. Stubborn inflation implies the Fed will need to keep rates at current levels for longer which underpins dollar strength and U.S. Treasury yields.

Dollar gains are against all G10 pairs and most other majors except for emerging market ZAR, TWD, BRL, and KRW. The dollar’s primary gains: +0.44% vs. CHF, +0.43% vs. AUD, +0.29% vs. JPY, +0.26% vs. EUR, +0.25% vs. MXN, +0.20% vs. GBP, and +0.16% vs. CAD.

U.S. Treasury yields are higher in all tenors but only fractionally, the biggest gain +0.019% in the 30-year tenor. Implied probabilities for a 25bps rate cut at the FOMC’s meetings this year are 63% for March, 89% for May, 96% for June, 83% for July, and 90% for September. The implied total of rate cuts this year is 1.40%

Bitcoin is +4.20% following yesterday’s SEC approval to trade Bitcoin ETF’s. Oil is +2.37% at $73.05/barrel.

Economic Calendar

USD - Core CPI m/m
AUD - Goods Trade Balance
USD - CPI m/m
JPY - Leading Indicators
USD - CPI y/y
USD - Unemployment Claims
EUR - ECB Economic Bulletin
EUR - Italian Industrial Production m/m
USD - Natural Gas Storage
USD - 30-y Bond Auction
GBP - Housing Equity Withdrawal q/q
USD - Federal Budget Balance
JPY - Bank Lending y/y
JPY - Current Account

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 146.413 144.709
eur/usd 0.91477 0.90814
gbp/usd 0.78737 0.78157
aud/usd 1.50155 1.48452
usd/cad 1.34129 1.3348
usd/mxn 17.071 16.95
Equities and Commodities
S&P 500 4786.41
NASDAQ 16822.3
DOW 37706.1
GOLD 2031.23
SILVER 22.94

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.