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.

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.

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.

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