Investors on Wall Street gave early praise for the upcoming US inflation data the day before. On Tuesday, the upbeat sentiment appears to be sustained, with the equity futures market pointing to a slightly firmer open to trading in the cash market. Market players seem to be betting that inflation has peaked. The fact is that inflation in the USA has been falling since the summer, but is still at a level that is far too high.
The closely watched November consumer price data, which is due to be released before the start of trading, is expected to continue the fall in inflation. Should the data show otherwise, the latest gains should quickly be waste again, one believes in retail. Because rising inflation data would be a steep template for the US central bank to stick to the strict tightening of monetary policy. Ultimately, the market is hoping that the Fed’s zeal will ease off a bit. But the data has to match.
“There aren’t many days as important as the next two, and today’s US CPI and tomorrow’s Fed meeting will likely mean the difference between a big Santa Claus rally and a visit from a miser (Scrooge) before Christmas “, says market strategist Jim Reid of Deutsche Bank, referring to the US Federal Reserve’s interest rate decision on Wednesday. He also recalls that the best and worst day of the year for the S&P 500 has always been a consumer price day.
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(END) Dow Jones Newswires
December 13, 2022 06:04 ET (11:04 GMT)