US open: Wall Street jumps as inflation eases
Fiona Cincotta September 14, 2021 2:27 PM
US stocks open higher after softer inflation causes investors to reassess the likelihood of a sooner move by the Fed.
Dow futures +0.35% at 34988
S&P futures +0.36% at 4486
Nasdaq futures +0.35% at 15490
FTSE -0.14% at 7060
Dax +0.3% at 15751
Euro Stoxx +0.15% at 4180
Stocks jump as bets of a move by the Fed ease
US stocks are set to open firmly higher following the weaker than expected inflation data. Consumer prices rose at a slower pace than expected in August prompting bets that peak inflation could have passed.
CPI rose 5.3% YoY in August, down from 5.4% in July. On a monthly basis headline CPI rose 0.3%, down from 0.5% and below the 0.4% forecast.
In core CPI the slowdown was even more evident with Core CPI rising 4% down from 4.3% and below forecasts of 4.2%.
The softer inflation prints caused investors to push back on bets that the Fed could move sooner to taper bond purchases. Easing inflation would take the heats off the Fed to move prematurely. PPI data for August also rose at a slower pace so the evidence does appear to be building that peal inflation has passed. That said, supply chain bottle necks are expected to persist for a while so its unlikely that either PPI or CPI will drop dramatically or rapidly.
As bets of the Fed tightening policy eased, stocks have jumped and the US Dollar has fallen steeply.
Where next for the Dow Jones?
The Dow is once again making a move towards the 50 sma, After rejection yesterday another attempt could see the index retake this key support turned resistance. Any recovery needs to retake the 50 sma at 35070 and horizontal resistance at 35180 for the buyers to gain traction. On the downside a break below the 100 sma could potentially spark a more significant selloff.
FX – USD tanks, GBP rises post jobs data
The US Dollar is plunging following the weaker inflation print.
GBP/USD the pound is pushing higher after encouraging UK labour market data. The data revealed that the number of employees on UK payrolls is back at pre-pandemic levels. The number of job vacancies rose 35% to 1 million. This suggests that the labour market can absorb the furloughed workers as the scheme winds down, prompting speculation of a sooner move by the BoE to hike interest rates.
GBP/USD +0.44% at 1.3898
EUR/USD +0.23% at 1.1837
Oil rises on US output concerns, IEA outlook
Oil prices are pushing higher trading around 6 week high as concerns over supply in the US continue to underpin the price. Supply hasn’t recovered from Hurricane Ida and is bracing for more hurricane disruption.
On the demand side, the IEA sees a 1.6-million-barrel demand rebound in October which is then expected to continue growing until the end of the year. Although the IEA did lower their global oil forecast for 2021 as a whole.
OPEC last week said they see demand easing in the final quarter but picking up to pr-pandemic levels in 2022.
Brent trades +0.4% at $73.51
21:30 API crude stockpiles
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
- Open a Forex.com account, or log-in if you’re already a customer.
- Search for the market you want to trade in our award-winning platform.
- Choose your position and size, and your stop and limit levels.
- Place the trade.
Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.
Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.