2023-03-14 15:21:37
Five scenarios for the market's reaction to the February CPI report
1) As expected: 0.4% is relatively high
And it will temporarily affect stocks and strengthen the US dollar - but most of the focus will shift to banks. No transaction should be done based on CPI.
2) Small stroke: 0.5% release guarantees a move - for more than a few seconds - in favor of the greenback and against stocks.
However, I suspect that if the markets seem happy at the moment because of the good news from the banks, such a move will only serve as an opportunity to change direction. If the trend is downward, the news will only hurt the wound more.
3) Less loss: if US 0.3%
Reported increase in core CPI cheers markets and hits US dollar hard. However, if the markets are worried about the banks around the release, we could see them pull back shortly after. CPI only serves as a distraction from the main topic. If the trend is positive, the CPI report will be more than good.
4) The big hit: A release of 0.6% or higher would bear down on the market and (arguably) strengthen the US dollar. This would encourage the Fed to tighten despite concerns about banks. . CPI returns to center stage at that point. The transaction is done according to the process.
5) Losing More: A slowdown to 0.2% CPI MoM or lower would be great news for consumers, the Fed and the markets. Regardless of banking issues, we will see stocks rise and the US dollar rise. Trading will seek to follow the trend.
73 views12:21
B
