Market Focus Analysis:
Pulse Focus 1: U.S. June CPI year-on-year dropped significantly, from a prior reading of 4.2% and an expected 3.8% to 3.5%; the decline in core CPI also exceeded expectations, falling to 2.6% from a previous 2.9% and an expected 2.8%.
Focus Analysis: While a peak in CPI was foreseeable, the final data came significantly below expectations, dealing a major blow to year-end rate hike expectations. The dollar consequently weakened, while gold and U.S. equities surged sharply. If subsequent inflation data continue to decline, the market’s anticipation of rate hikes could be completely reversed.
Asset alert: The US Dollar Index (DXY) has declined from the recent range high around 101.30/40 to the lower boundary at 100.60. Although it rebounded overnight toward 101, a second test of the lows cannot be ruled out. If the index breaks below the current support level, further downside could extend toward 100.20 and even the 100 level.
Pulse Focus 2: Federal Reserve Chair Waller testified before Congress that the Fed’s current top priority is restoring price stability and ensuring that the high inflation of the past five years becomes a thing of the past. The labor market remains broadly stable, but the impact of new technologies such as artificial intelligence on productivity, employment, and inflation needs to be assessed.
Focus Analysis: Wash’s remarks may appear to emphasize price stability, sounding hawkish; however, given that actual CPI data has already been released and significantly undershot expectations, the statement instead conveys a dovish tone. With inflation data cooling down, the Federal Reserve’s subsequent focus will primarily shift to the labor market. And as the impact of the World Cup fades, a weak labor market is expected.
Asset Reminder: The Nasdaq 100 index has recently been trading in a wide range between 28,300 and 30,800, and may soon see another upward breakout. Intraday focus should be on the performance around Monday’s high of 29,860; a successful retest could lead to further gains toward 30,000.
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Gold: Yesterday, our plugin’s blue buy stop signal perfectly captured a 7-8x risk-reward ratio. We also reminded you to protect profits after the CPI data release. Today, we’ll focus on how the overnight data left demand zones behave; if liquidity gets swept at that level, we may re-enter on a rebound. For exact positions, please consult the plugin.
(Gold 15-minute chart)
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Nasdaq: The Nasdaq may be preparing for a wide-range fluctuation, attempting another test above the 30,000-point level. Today, we will closely monitor rebound signals following the sweep of near-term liquidity. If there is a clear signal of momentum breaking through upward, light positions can be considered. For detailed positioning, please consult the plugin.
(NASDAQ 15-minute chart)
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Crude oil: Prices are consolidating around 80, and today we’re watching for a potential breakout followed by a pullback. With Trump possibly having more room for provocative moves on the U.S.-Iran situation after the CPI decline, detailed positions please consult the plugin.
(Crude Oil 15-minute Chart)
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Today’s key financial data and events to watch:
20:30 U.S. June PPI Year-on-Year
