Investors are praying for soft US inflation data! | MarketTalk: What’s up today? | Swissquote

Show notes

The S&P500 surpassed last summer peak level and recovered to the highest levels since April 2022 on hope that… we could see a sufficiently soft inflation data from the US, which could chase the hawkish Federal Reserve (Fed) clouds away and clear the sky for a Fed pause.
The US inflation data is due today, as the Fed begins its two-day policy meeting. Expectations are rather soft – which make them harder to beat.
While equity traders seem optimistic about the end of the Fed tightening, bond traders are more skeptical. The US 2-year yield remains on a positive trajectory. The US sovereign bonds outlook will remain negative until a strong hint that the Fed rate hikes are over.
The US dollar is softer, and a sufficiently soft US inflation could push the EURUSD past its 100-DMA, near 1.08.
There are diverging opinions about what happens next. Some investors think that the Big Tech led equity rally should continue with the rest of the market due to catch up with their technology peers. Some others think that the S&P500’s fresh bull market is just an illusion and doesn’t mean that the bear market is over.
Elsewhere, crude oil was hit by another wave of selloff yesterday which sent the barrel of American crude below the $67 level.
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