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Jefferies strategist Zervos: Dont place too much emphasis on the Feds September meeting.Jefferies strategist Zervos: The Feds policy is quite tight. The Feds balance sheet is no longer a "booster" for the economy.On August 20th, Melanie Debono of Panson Macro wrote in a report that the European Central Bank is likely to cut interest rates again in September despite the lack of signs of easing eurozone inflation. Data showed that the eurozones annual inflation rate remained unchanged at 2.0% in July, with core inflation also stable. Debono stated that with accelerating food inflation and the impact of base effects from oil prices, eurozone inflation is likely to rise again in the remaining months of the year. However, she noted that the ECB will consider volatile markets and a weak US economy as sufficient reason to cut interest rates to 1.75% at its September meeting. A decline in core inflation in August would further solidify this move.Indias natural gas production fell 3.2% year-on-year in July.On August 20th, Danni Hewson of AJ Bell stated in a report that high inflation in the UK may make investors and consumers more cautious. The UKs annual headline inflation rate was 3.8% in July, higher than the market forecast of 3.7%. Hewson noted that concerns about potential increases in energy prices and taxes in the UK in the autumn may be making many people cautious. She added: "With the July Retail Price Index (RPI) figure of 4.8%, the expected sharp increase of 5.8% in rail fares next year will put additional pressure on many household budgets."

USD/CHF Consolidates Around 0.9040 As Attention Shifts To US Inflation

Daniel Rogers

Apr 10, 2023 14:27

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The USD/CHF pair continues to trade lacklusterly above the crucial support level of 0.9036 in the early Tokyo session. Investors are shifting their focus to Wednesday's release of United States Consumer Price Index (CPI) data, making it difficult for the Swiss Franc to gain traction.

 

As tensions between China and Taiwan escalate, S&P500 futures have pared some of their gains. The market's anxiety has been alleviated by the increasing intensity of Chinese military exercises around Taiwan Island. In addition, concerns of a recession are likely to cause volatility in US equities.

 

Jamie Dimon, CEO of JPMorgan Chase, stated in an interview with CNN that the recent banking turmoil caused by the dissolution of Silicon Valley Bank (SVB) and Signature Bank has increased the likelihood of a recession in the United States.  Despite the robustness and security of the banking system, the recent turmoil in the financial system is "another weight on the scale" toward recession, he added.

 

The US Dollar Index (DXY) is protecting the 102.00 support level ahead of US Consumer Price Index (CPI) data. According to the consensus, headline inflation will fall from 6.0% to 5.2%. In addition, the headline monthly CPI would decelerate to 0.3% from 0.4% previously reported. As a consequence of oil prices remaining low in March, inflationary pressures are anticipated to become evident.

 

In contrast, the core CPI, which excludes crude and food prices, is anticipated to increase to 5.6% from 5.5%. The tenacity of inflationary pressures is maintained by the resiliency of demand for essential products, as a result of a higher labor cost index. A similar event could compel the Federal Reserve (Fed) to raise rates again at its May monetary policy meeting.

 

Regarding the Swiss Franc, Swiss markets are suspended on Easter Monday. This week, the Producer Price Index (PPI) data will have an impact on the Swiss Franc.

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