The largest economy in the world’s inflation rates on Valentine’s Day
The inflation figures from the biggest economy in the world are among the most keenly anticipated economic indicators by the market on Valentine’s Day. Investors continue to hold out optimism that the Federal Reserve would start decreasing rates later this year, despite the eye-popping January employment report that led some market players to concede that the peak in interest rates is still some time off.
“The market could have embraced the return to inflation normalcy a bit too enthusiastically,” says Kevin Muir, a Toronto-based independent proprietary trader. “I’m not sure if it will be from this announcement or the next one, though.”
The market seems persuaded that inflation fears are unfounded, notwithstanding a few cautions to that effect. Although Fed Chair Jerome Powell stated last week that rates may need to climb higher than anticipated if the economy continues to demonstrate such strength that threatens the Fed’s achievement in reducing inflation, the market anticipates a slowdown in rate hikes.
The January CPI Reading
According to economists surveyed by Reuters, the Consumer Price Index (CPI) data on Tuesday is anticipated to reveal increases in headline prices and the core CPI of 0.5% and 0.4%, respectively, month over month for January.
Market updates worldwide
The yen recovered its losses on Tuesday as Japan nominated a new central bank governor, while Asian markets rose. The good mood is increased by reports that U.S. Secretary of State Antony Blinken may meet with top Chinese official Wang Yi at the Munich Security Conference, which begins this week.
The stock index is on the verge of breaking records as investors continue to show a keen interest in British equities and bonds. The market is also benefiting from several global trends, such as the reopening of China’s economy and rising energy costs. Ten-year government bond yields have decreased by 27 basis points this year alone, reaching 3.4%, one of the largest drops among the Group of Seven most developed nations.
According to a Reuters poll released on Tuesday, the Bank of England will raise borrowing prices one last time next month in an effort to battle double-digit inflation as the country’s economy almost surely enters a recession. The right’s hold on power in Italy has grown stronger as a result of Prime Minister Giorgia Meloni and her coalition partners winning resounding victories in the two richest areas of the nation.
Last but not least, according to Bloomberg, Qatari investors are getting ready to launch an offer to purchase Manchester United in the upcoming days.