Daily Alert – Thursday 12th January 2023: All eyes on US CPI

Mark NugentDaily Alert, Jan 2023

Daily Alert – Thursday 12th January 2023: All eyes on US CPI

Good morning.

Yesterday was moderately risk-on. Equities continued to rise, the USD and US 10-year yield continued to drop.

All eyes are now on US CPI, expected at 1330 UK-time. The year-on-year Core CPI expectation is 5.7 percent, against a prior (December) 6.0%. Anything below 5.7 percent will add to the market belief that the Fed will ease up on the interest rate hiking. Even a print of 5.7 percent itself may have that effect, as that number is below the prior.

Now, there is Core CPI and Headline CPI, and there is month-on-month and year-on-year analyses, so that’s four measures of inflation. Some agencies have some of them as Tier I announcements (most likely to move the markets) and some agencies have others. So, the immediate market reaction can be confusing, and indeed confused.

I do not trade these announcements at the time they are made. I wait to see if they change the fundamentals or the sentiment in any lasting way. That is what I will do this afternoon and tomorrow.

I will be back tomorrow with your Performance Report for December and the full year. I will also have a second video for you, taking a wider look at 2022 trading compared to prior years and how we fought our way through the year as the economic environment changed significantly when central banks began to increase interest rates. It was no mean feat, even if I say so myself.

VIP Club members can see today’s video, all brief trading videos, the Monthly and YTD Performance videos, the Trading Video Course and download the MTM Indicators software HERE