U.S. futures dragged by hotter than expected CPI

Dow jones future broke all previous major support after the CPI data. Also on technical chart it has broken trendline. Next major support is 37800 as per futures and if it does not bounce back in early session we may expect the level. However at every bounce it may face resistant.

 

• Mar Core CPI MM, YY > estimates
• Euro STOXX 600 index down ~0.3%
• Dollar jumps: USD/JPY hits highest since 1990
• Crude up; gold falls; bitcoin off ~2%
• U.S. 10-Year Treasury yield jumps to ~4.49%
• U.S. equity index futures plunge: Nasdaq 100 slides ~1.5%
• Mar CPI MM, YY > estimates

U.S. STOCK FUTURES BURNED BY HOTTER-THAN-EXPECTED CPI

U.S. equity index futures are sharply lower, while yields are jumping, in the wake of the release of the latest data on U.S. consumer prices. E-mini S&P 500 futures are down more than 1% vs a gain of about 0.15% just before the numbers came out.

The March headline CPI numbers on a month-over-month and year-over-year basis were both hotter-than-expected. The core readings on a month-over-month basis and year-over-year basis were also above the Reuters Poll numbers:

According to the CME’s FedWatch Tool, the probability that the FOMC leaves rates unchanged at its April 30-May 1 meeting hasn’t moved much. It now stands around 98%. There is around a 2% chance that the Fed cuts rates 25 basis points.

Looking further out into 2024, the FedWatch Tool is now showing a bias for no June 25 basis point rate cut. With this, there is now a bias for rates to tick down by just 50 basis points through December.

The U.S. 10-Year Treasury yield is now around 4.50% vs 4.35% just before the data was released. The yield ended at 4.37% on Tuesday.

All S&P 500 sector SPDR ETFs are lower in premarket trade, with real estate , down more than 2%, taking the biggest hit. Energy , off around 0.4%, is down the least.

The KBW regional banking ETF is off more than 2%.

Regarding the CPI data, Brian Jacobsen, chief economist at Annex Wealth Management in Menomonee Falls, Wisconsin, said:

“Core inflation has been stuck at 0.4%. Yes, that’s better than it used to be, but double what it needs to be.”

Jacobsen added “The services effect isn’t just shelter. There’s been a wedge between food at home and food away from home, partially reflecting the rising costs of rents, utilities, and labor for businesses. A June rate cut isn’t only off the table, it’s probably not even on the menu.”

 

Article Source: https://in.tradingview.com/news/reuters.com,2024:newsml_L2N3GJ0NM:0-u-s-stock-futures-burned-by-hotter-than-expected-cpi/

 

Yellow metal (Gold)may touch Rs.100,000 if any uncertainty happens in global economy