Is high US inflation good or bad for crude oil? | MarketTalk: What’s up today? | Swissquote

Show notes

No one was naïve enough to expect an agreement on the US debt ceiling yesterday, when US President Joe Biden met Kevin McCarthy.
US treasuries remain under a decent selling pressure especially at the short end of the yield curve as investors dump US short term papers due to the rising US default risk. Gold gained, as equities slid.
The US will reveal a much-important update to its CPI today, and the data could also shake sentiment at today’s trading session.
Core inflation is expected to have slightly eased from 5.6% to 5.5% in April, headline inflation is seen steady at 5%, while we might see an uptick in monthly headline figure, to 0.4% from 0.1% printed a month earlier due to the spike in energy prices after OPEC cut production last month.
A CPI report in line with expectations will keep focus on debt ceiling, but a report that diverges from expectations could give an extra spin to market pricing. A softer-than-expected CPI report should further fuel the Fed rate cut expectations into this fall and relieve a part of the positive pressure on US yields, whereas a stronger-than-expected read will hardly boost any hawkish bets.
High inflation could also mean lower appetite for oil.
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