Surprise fall in CPI boosted equities and gold while worrying the dollar. Oil prices slipped but were set for weekly advances. Cryptos recorded new gains.

Updated time: 16 Jan, 2023, 06:17 (UTC+04:00)

Stocks:

Wall Street closed higher as CPI inflation data fell for the first time in 2-1/2 years, bolstering hopes on less aggressive Fed’s rate hikes in the coming month. Currently, 91% investors strongly bet on a 25 bps rate hike in February compared with 77% previously. Microsoft shares rose 1.2%, boosting gains for S&P 500 and Nasdaq. Dow Jones and Nasdaq both rose 0.64% while S&P 500 added 0.34%. The Energy sector performed the best with 1.9% advance.

U.S stock futures traded flat after CPI eased, except Nasdaq futures dropping 0.1%. Ahead of the day, fresh import and export price index data along with University of Michigan’s Sentiment and Expectations surveys would be the market’s concern.

Commodities:

Oil prices lost 0.2% but were on track for strong weekly gains of more than 6% as inflation concerns cooled down and expectations of demand in China grew. Brent crude oil futures and U.S. WTI crude oil futures settled at $83.86 and $78.27 per barrel, respectively.

Gold digested the news of cooling inflation to reach the fourth consecutive week gain. Spot gold added 0.1% to $1,898.86, while gold futures gained 0.2% to $1,902.10. Copper prices were steady and on track to their best week over 2 months while copper futures climbed 0.1% to $4.1755, and were set to gain nearly 7% this week.

Currencies:

The U.S dollar wavered and hit a 7-month bottom after U.S inflation boosted hopes for a slower Fed rate hike path, with its index down to lowest level since June to 102.220. Euro and sterling inched up very little to trade at $1.0849 and $1.221 respectively. Meanwhile, yen strengthened 0.12% to $129.10 after reaching a fresh 7-month high of $128.65 earlier in the session. Elsewhere, the Aussie fell 0.11% to $0.696 and the kiwi dropped 0.34% to $0.637. 

Cryptocurrencies:

Cryptos responded positively to the release of December inflation data. Bitcoin rose 8% for the day to hit $19,000, while Ethereum rallied 6% to trade around $1,427.