The dollar index hovered near 2-month lows to trade around 95 on Thursday, as hot inflation data did not have much of an effect on an already hawkish rate outlook. The December consumer price index increased 7% from a year earlier, accelerating at its fastest pace since June 1982. However, the hot inflation report failed to support the dollar further as it came in line with expectations and has been largely priced in to the markets. Moreover, Federal Reserve chair Jerome Powell dashed expectations for a more hawkish approach in a Congressional testimony earlier this week. While acknowledging that the US economy was ready for higher interest rates and quantitative tightening to combat inflation, he said policymakers were still debating approaches to reducing the Fed’s balance sheet which could take up to four meetings to arrive at such a decision.
After 40 Years Highest CPI stock markets are concerned about FED move. The market is trying to hold its gains. The first resistance is 15.940 and first support level is 15.755 Level.
The Nikkei 225 Index fell 0.96% to close at 28,489 while the broader Topix Index shed 0.68% to 2,006 on Thursday, as investors grew concerned after Japan’s daily Covid cases exceeded 13,000 on Wednesday for the first time in over four months, spurred by the fast-spreading omicron variant. This prompted a Japanese minister to allay public concerns, saying that he is confident the country can co-exist with the virus while achieving growth.
China 10 Year Government Bond Yield decreased to a 19-month low of 2.794%, as China will keep loose monetary policy. The People's Bank of China at the December 20th fixing slashed its one-year loan prime rate by 5 bps to 3.8 percent, the first-rate cut in 20 months, in a bid to support growth amid property debt woes and persistent COVID-19 outbreaks. Meanwhile, China plans to sell a record amount of treasury bonds in 2022, while keeping overall interest rates of the issuance lower, as Beijing adopts a proactive policy to stabilize economic growth, a senior official at the finance ministry said in late December.
European stock markets are almost flat on Thursday, with market sentiment largely reflecting the uneasiness regarding inflation and the outlook for unwinding monetary stimulus, after US consumer prices saw their steepest rise in nearly four decades. Meanwhile, earnings and trading updates in Europe were also drawing attention, namely from retailers Tesco and Marks & Spencer, with the former saying it is expecting higher operating profits than stated in earlier outlooks amid better-than-expected sales to date.
DAX is trading flat today as a result of high inflation and rising omicron cases in Europe. First resistance to be tested will be 16.034 and first support is 15.912 Level.