What the CPI Data Means for Markets
What’s in Today’s Report:
- What the CPI Means for Markets
- CPI Data Takeaways
- How Will Russia’s Production Cut and the New SPR Release Impact Oil Markets?
U.S. equity futures are lower despite a stable Treasury market and better-than-feared inflation data overseas as investors continued to assess post-CPI Fed policy expectations.
U.K. CPI fell to 10.1% vs. (E) 10.3% in January down from 10.5% in December which sent the pound lower. Despite the bigger than expected drop, however, inflation remains far too high in the U.K. and more aggressive policy will be warranted to get price pressures back down towards the BOE’s target over time.
Today, focus will be on economic data as there are several important reports due to be released including: Retail Sales (E: 1.7%), Empire State Manufacturing Index (E: -18.5), Industrial Production (E: 0.5%), and the Housing Market Index (E: 37).
As has been the case lately, investors will be looking for signs of moderation in growth metrics (but not an all out collapse) and faster declining price readings to keep the hopes of a soft/no landing alive. Otherwise, it will be difficult for stocks to resume their 2023 advance.
There are no Fed officials scheduled to speak today but there is a 20-Yr Treasury Bond auction at 1:00 p.m. ET and if demand is weak and yields begin to add to yesterday’s upward moves, stocks could come for sale.
