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Traders are increasing their bets on two more quarter-point rate cuts from the Federal Reserve this year, including one next week, after the September CPI report showed consumer inflation rose slightly less than expected last month. Futures contracts tied to the Feds policy rate also show rising expectations for further rate cuts at the central banks January meeting.Nick Timiraos, a "Federal Reserve mouthpiece," noted that the US Consumer Price Index (CPI) for September was lower than expected. Core prices rose 0.23% in September, bringing the core CPI annual rate down to 3.0%. Overall prices rose 0.31% month-over-month, bringing the overall CPI annual rate to 3.0%.On October 24th, the US Consumer Price Index (CPI) rose slightly less than expected in September, paving the way for another Federal Reserve interest rate cut next week. The US Department of Labor said Friday that the CPI rose 0.3% month-over-month in September, following a 0.4% increase in August. The annualized rate reached 3.0%, a slight improvement from Augusts 2.9% increase. Excluding the volatile food and energy components, the core CPI rose 0.2% month-over-month (from 0.3% in August), and the year-over-year increase fell to 3.0% from 3.1% in August. Despite the government shutdown halting economic data releases, the CPI report was still released to help the Social Security Administration calculate cost-of-living adjustments for millions of retirees and other benefit recipients in 2026. The data was originally scheduled for release on October 15th. The pass-through of import tariffs has been relatively gradual, as businesses work through inventories accumulated before Trumps broad tariffs were implemented and absorb some of the tax burden. Economists note that businesses have achieved this at the expense of hiring and estimate that consumers have borne approximately 20% of the tariff costs so far.On October 24th, the US Consumer Price Index (CPI) report for September showed both overall and core indicators falling short of expectations. Analysts said this suggests the Federal Reserve will almost certainly cut interest rates again next week, and the data also supports the Trump administrations view that inflation is under control and that tariffs will not trigger a surge in the cost of living. Analysts noted that the data showed gasoline prices appear to be a driving factor in the overall indicator: the gasoline price index rose 4.1% in September, the largest monthly increase among all items.Money markets are pricing in a 55% chance of an ECB rate cut by July 2026, compared with a 50% chance before the U.S. data.

WTI Price Analysis: Oil purchasers must sustain a break above $80.00 to maintain control

Daniel Rogers

Apr 04, 2023 13:39

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WTI crude oil prices remain stagnant near $80.30 as commodity traders search for fresh impetus to extend Tuesday's largest daily gain in 11 months. Thus, the price of black gold oscillates around a seven-week-old resistance line with an overbought RSI. (14).

 

WTI purchasers are challenged by not only the $81.00 trend line barrier and the overbought RSI (14) but also the waning bullish bias of the MACD and multiple peaks marked during January 2023 around $82.70.

 

In the event that the energy benchmark surpasses $82.70, the Oil bears' last line of defense could be a rise to a high near $83.30 in December 2022.

 

In contrast, pullbacks can target the $80.00 round number and the $79.00 swing low from late Monday.

 

However, a rising support line from March 24 and the 200-day simple moving average, respectively near $76.15 and $74.35, could pose a threat to Oil skeptics in the future.

 

Should WTI bears maintain control beyond $74.35, a two-week-long support line near $70.80 and the psychological threshold of $70.00 can entice Oil sellers.

 

Buyers of WTI crude oil appear to be running out of steam, but the bears have a considerable distance to travel before regaining control.

 

 


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