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Yesterday's release of US CPI (inflation) data contained a surprise: lower than expected inflation. The annualized rate fell from 4.2% to 3.8%, while it was expected to fall to only 3.8%. The month-on-month data showed a decrease of 0.4%. This was encouraging for US Dollar bears who will see this data as certain to drive a more dovish tilt on monetary policy at the Fed, and the US Dollar has sold off since this data point was released. The news has also helped drive weak rises in US stock market indices, which mostly remain quite near their record highs.
The USA / Iran confrontation has continued to escalate, with the USA bombing Iran for another night after Iran fired on ships in the Strait of Hormuz and on several Gulf nations. Trump is threatening to start targeting infrastructure next week in an attempt to drive Iran to the negotiating tabIe. I have been writing here for a while that the US administration's pursuit of a "good deal" with the regime in Iran will never yield fruit and is incompetence and wishful thinking taken to an infinite level. Unfortunately, I am being proven right. The Strait of Hormuz is effectively 99% closed, with just a tiny trickly of crude oil shipping getting through, or any shipping for that matter. We are also seeing spot WTI Crude Oil a little higher today above $80 - I said two days ago that WTI could be a good buy today after finding support at the former pre-war resistance level of $67.11.
The USD/JPY currency pair is looking a little weaker but is still basically consolidating within an area of high volatility not far from its multi-decade high price. Forex markets have had a very quiet Asian session.
Precious metals such as Silver and Gold are heading lower again, with both well-established within strong bearish trends and near multi-month lows. Gold, notably, is still being held by a long-term descending trend line which currently sits at about $4,200. I do not short commodities, but if I did, I would be short of these two precious metals.
Bitcoin has risen to reach a new 3-week high where it has tested the key resistance level just above $65,000. So far, it has not succeeded to break out beyond that level. If it does later today, that will be a bullish sign for Bitcoin.