Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.
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The Canadian trimmed CPI y/y came in at 5.1%, less than the previous 5.3% y/y and below the consensus of 5.2% y/y. This measures consumer inflation but excludes the 40% most volatile items. Core retail sales also declined, printing at -0.6% m/m/ against the -0.1% expected.
Last week’s CPI and PPI release show a stickiness to inflation. The market seems to be coming around to the Fed’s view whilst several Fed officials talk up interest rates. This week the Fed’s minutes will be released on Wednesday and Friday sees the all-important core PCE release. Join FXCM senior market specialists Russ and Nik as they discuss these and more.
It is reacting slower than expected, but the NAS100 IS reacting to higher real rates.
FXCM’s USDOLLAR has charted a lower peak followed by a lower trough. This is a defined down trend.
Sticky inflation persists. The prices of median goods and services have ticked up. This slow change of prices is a headache for the Federal Reserve. They will worry that inflation expectations have anchored to an elevated level.
The AUDUSD charted a spinning top yesterday. This is a candle of uncertainty. Bulls tried to take price up and bears tried to take price down. Neither was successful, with AUDUSD closing fairly flat on the day.
UK headline inflation dropped to 10.1% with a 4% drop in petrol and diesel prices in January. The core inflation rate decreased below 6%. The continuous disinflation trend in goods categories due to improving supply chains and lower consumer demand is linked to the decline in core inflation.
The real yield is in its hawkish channel, between the upper blue and red bands (top chart). The core CPI printed at 0.4% m/m, higher than the previous 0.3% m/m. This is 4.9% annualised, much higher than the previous 3.66%. The Fed still has work to do to bring core inflation down towards its target of 2% average.
Core inflation dropped to 5.6% y/y, down from the previous print of 5.7% y/y. The decline gives way gradient (blue circle) and missed the consensus of 5.5% y/y. It is moving in the right direction.
FXCM's 2023 outlook webinar, hosted by senior market specialists Russell Shor and Nikos Tzabouras.
The market has been resilient despite the poor showing. This is telling. Dow Theory maintains that a bull market has three phases. The first phase, accumulation, sees smart money recognising the current poor conditions, but positioning for the turn up. Bids increase as selling volumes diminish. There is a feeling of pessimism. However, prices have stopped going down. This matches with current resiliency.
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