February 14, 2023: US Inflation Data is Due Today

The Upcoming US Inflation Data May Shock the Markets.

Today, Tuesday, February 14, all eyes are on inflation data in America, which may reveal that the inflation battle is not over. Analysts are expecting the consumer price index to rise by 0.4% in January, an increase of 6.2% on an annual basis.

The US Federal Reserve, which insists on its strict anti-inflationary policy, may find a new motive to continue its approach in today’s data. This comes at a time when officials from the US Federal Reserve have sent signals about a relative decline in inflation in several statements. Still, recent data and expectations indicate the opposite.

Since the end of 2022, the consumer price index has taken a downward trend, but 2023 may show that the inflation situation in America and the world may be much worse than markets and analysts expected.

Kazuo Ueda: New Governor of the Bank of Japan.

The Japanese government has officially chosen economist and former BoJ board member Kazuo Ueda as the next governor of the Bank of Japan to succeed Haruhiko Kuroda, whose term expires in April.

Ueda, 71, will be the first governor of the Bank of Japan with an academic background, as he obtained his Ph.D. degree from the Massachusetts Institute of Technology and worked as a professor at the University of Tokyo. He is also a former member of the board of directors of the central bank between 1998 and 2005.

“I will answer various questions in Parliament once the government’s plan is presented,” Ueda told reporters Tuesday morning, according to a video broadcast by TBS. This meeting is the focus of investors’ attention, as they will look for comments and hints regarding Ueda’s upcoming plan and expected monetary policies.

Japanese Stocks Closed Higher After BoJ Assigned New Governor.

Japanese stocks rose on Tuesday after appointing the new governor of the central bank of Japan and after economic growth data came in below expectations.

Data released today showed Japan’s economy grew at an annual rate of 0.6% in the three months ending in December, when it was expected to rise by 2%, with household spending – which accounts for more than half of the country’s GDP – increasing by 0.5%.

The Nikkei index closed the session by 0.64% at 27602 points, and the broader Topix index rose by 0.78% to 1993 points. The US currency fell against its Japanese counterpart, by 0.39%, at 131.91 yen, at exactly 07:13 GMT.

Gold Prices Rise Ahead of the Release of US Inflation Data.

Gold prices rose on Tuesday, February 14, with the dollar falling as investors await US inflation data that could determine the next steps for the Federal Reserve’s monetary policy. Gold rose in spot trading 0.5% to 1861.93 dollars an ounce after it fell to its lowest level since early January in the previous session. US gold futures rose 0.4% to $1,870.60.

Gold is susceptible to rising interest rates because this increases the opportunity cost of holding that non-yielding asset. Investors are eagerly awaiting US consumer price index data for January, which will be released later today, with economists expecting the core consumer price index to rise 0.5% monthly. And if the CPI comes out lower than expected, the Federal Reserve will likely bear a slowdown in raising interest rates, “which could mean a resumption of the dollar’s decline and a recovery in gold.”

Money markets expect the Fed’s target interest rate to peak at 5.188% in July versus the current range of 4.5-4.75%. The dollar index fell 0.2%, making gold in the US currency less expensive for buyers holding other currencies. Silver remained unchanged in spot transactions at $21.97 an ounce, platinum rose 0.1% to $954.76, and palladium rose 0.2% to $1569.07.

US Stocks Closed Higher, Awaiting CPI Data.

US stock indices rose at the end of trading on Monday as investors turned their attention to the expected inflation data. All eyes are on the US consumer price index, due for release today, Tuesday, which is expected to have increased by 0.4% in January. This data may move the Federal Reserve’s interest rate strategy in upcoming meetings. At the close of trading, the Dow Jones rose by 1.1%, or about 376.6 points, to 34,246 points. Meanwhile, the S&P 500 rose by 1.1%, or 47 points, to 4,137 points. Nasdaq rose by 1.5%, or 173 points, to 11,891 points.

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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