The U.S. Consumer Price Index (CPI) release did not surprise markets, coming in as expected on a yearly basis. However, the monthly Core CPI was a slight surprise, coming in 0.3% above expectations. This higher-than-expected core inflation figure put pressure on riskier assets and commodities after the U.S. market opened. Nevertheless, NVIDIA’s impressive 8.15% surge helped risky assets to recover, and U.S. markets closed Tuesday with gains.
Today, the key macroeconomic event is the European Central Bank’s (ECB) interest rate decision. Markets are anticipating a 25 basis point rate cut, which would bring the rate down to 3.50%. In addition to the ECB meeting, the Swedish CPI came in 1.9% below expectations, signaling weaker inflationary pressures in Sweden.
In the U.S., attention will shift to the Producer Price Index (PPI) and Jobless Claims data, both of which could impact market sentiment. Following the CPI data release, futures and bond yields markets have started pricing in a 25 basis point rate cut by the Federal Reserve in September.
Over in Asia, Japan’s NIKKEI index continued to climb but encountered resistance at the 37,000 level, a critical point for the market. Meanwhile, the Hang Seng Index (HSI) extended its rise after signaling a rebound from the 17,000 level on Tuesday, indicating potential strength in Chinese markets.
In the cryptocurrency space, the correlation between digital assets and U.S. stock indices is strengthening. This relationship helped Bitcoin break through the $58,000 resistance zone, fueled by the broader market’s recovery.
Commodities were mixed. Gold bounced positively after testing the $2,500 zone, while silver remains range-bound, fluctuating between $28.60 and $29.00. These levels are crucial for silver, as a breakout could signal the next major move for the metal.
In summary, today’s focus is squarely on the ECB rate decision, along with key U.S. economic data. While inflation remains a concern, positive market performance in both equities and cryptocurrencies suggests resilience, though traders will be watching closely for further macroeconomic developments to guide their next moves.
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