US CPI to be released today

　　

U.S. equity indices marched higher throughout Wednesday’s trading. Markets continue to expect risk-on sentiment before the release of the U.S. CPI report, which is scheduled to be released during today’s American trading session. The Dow Jones Industrial Average rose 0.8% to close at 33973.01. The S&P 500 climbed 1.28% to close at 3969.61. The tech-heavy Nasdaq Composite jumped 1.76% to close at 10931.67.

Market participants are pricing in a softer reading for the CPI report, which would aid the rhetoric of a slower interest rate hike by the Fed; however, recent remarks from Fed FOMC members have continued to point towards a higher terminal rate. Professionals across industries have also called for the Fed to pause interest rate hikes to access the impact of 2022’s interest rate hike effects. A more conclusive result should come soon, though, as late January and February roll around the corner, corporations will soon release their 2022 Q4 earnings.

The benchmark 10-year treasury yield has retreated below 3.6% and was last seen trading at 3.55%, while the short-term 2-year treasury yield was last seen trading at 4.288%.

Bank of America, JP Morgan Chase, Wells Fargo Corp., and Citi Group Inc. will headline earnings on the 13^th.

Main Pairs Movement

The Dollar index, which tracks the U.S. Greenback against a basket of major foreign currencies, traded mostly sideways throughout the 11^th. The Dollar index notched a 0.1% gain and is currently trading around the 103.2 range.

EURUSD gained 0.22% throughout yesterday’s trading. Falling U.S. yields and falling short-term interest rate expectations have allowed the Euro to gain against the Dollar for four straight sessions.

GBPUSD saw minimal price movements throughout Wednesday’s trading. The British Pound could not gain much ground against the Dollar, despite a broadly weakened Dollar.

Gold lost 0.05% throughout yesterday’s trading. The Dollar denominated Gold has reached its short-term resistance level at $1880 per ounce and is currently consolidating around the $1876 per ounce price region.

Economic Data

Currency	Data	Time (GMT + 8)	Forecast
USD	Core CPI (MoM) (Dec)	21:30	0.3%
USD	CPI (YoY) (Dec)	21:30	6.5%
USD	CPI (MoM) (Dec)	21:30	0.0%
USD	Initial Jobless Claims	21:30	215K