Forex and stock markets are highly focused on today’s all-important release of US inflation data, which is likely to have a major impact upon the US Dollar and US stock markets.
- There will be a release of US CPI (inflation) data today, which has become the most important economic data release in the Forex market over recent months as US inflation has reached new long-term highs and pushed the Federal Reserve into a series of sharp rate hikes. Today’s data is expected to show a small drop in the annualized rate from 8.2% to 7.9%. If the rate increases, that would be likely to increase pressure on the Fed to take a more hawkish approach to rate hikes and we would likely see the US Dollar rise. If the rate falls by more than expected, that will reduce pressure on the Fed and would likely cause the Dollar to drop.
- Bitcoin has continued its fall, reaching a new 2-year low below $15,650 during the Asian session. The bearish market in cryptocurrencies has been given a push by the collapse of the Binance / FTX crypto exchanges deal, with Binance pulling out due to FTX’s financial problems. FTX has stated they need an injection of $4 billion to remain solvent. There is a risk of institutional contagion as many hedge funds and financial institutions have invested in cryptocurrencies such as Bitcoin.
- The US mid-term congressional election results remain in the balance, as counting has not yet been completed in several key Senate and House races. It seems likely that the Republicans will gain control of the House, but they may not gain control of the Senate, and if they do, it will be a very narrow majority. The better Republicans do, the more of a positive bump the stock market will be likely to enjoy, and the more the US Dollar will likely decline against other major currencies.
- WTI Crude Oil seems to have made a technical bearish double top at $93.50, suggesting the current downwards movement may still have some way to run, although the price is now approaching a supportive area at $83.89.
- Daily new global coronavirus cases dropped last week, continuing a downwards trend which began last July.
- It is estimated that 68.2% of the world’s population has received at least one dose of a coronavirus vaccination, while approximately 8.1% of the global population is confirmed to have contracted the virus at some time, although the true number is highly likely to be much larger.
- Total confirmed new coronavirus cases worldwide stand at over 638.9 million with an average case fatality rate of 1.03%.
- The rate of new coronavirus infections appears to now be significantly increasing only in Japan.