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CAD inflation: Fall in CPI expected
BY Janne Muta
|June 27, 2023Today’s main risk event is the CAD inflation data release. The analyst consensus expectation is that the CPI will fall. A significant decline in the annual inflation rate is expected due to the high base effect from the increase in May last year. Note that both the median and trim y/y measures have been falling for five consecutive months. USDCAD has been trending lower since double topping in May. Heads up for the US CB consumer confidence data!
In yesterday’s trading, Nasdaq continued lower while DJ and DAX lost some of the recent downside momentum, suggesting the selling pressure could be easing. DAX was trading relatively close to a major support level which explains the renewed interest from the bulls. DJ however has some technical hurdles ahead before the market can turn around.
Looking at the US equity markets at the sector level it has been the real estate, energy, and materials sectors that have performed well. They’ve been supported by lower interest rates and gains in commodity prices. Consumer discretionary and technology sectors have also been strong performers in the past month, driven by optimism about the economy and the rally in mega-cap tech stocks. Utilities have been underperforming indicating investors don’t believe they need the relative protection from the dividend stocks.
USDCAD
USDCAD is bearish below 1.3226 and could trade down to 1.3060. Above 1.3226, look for a move to 1.3250.
DAX
DAX broke out of a bearish trend channel and could be turning bullish. Above 15 915, look for a move to 16 000 and then possibly to 16 180. Below 15 915, we might see the market trading to levels near yesterday’s low (15 710).
Gold
XAUUSD remains bearish below 1937. Above the level, gold could trade to 1950. Below 1937, look for a move to 1887.
USOIL
USOIL is bullish above 68.75 and could trade higher to 70.85. Below 68.75, look for a move to 68.10.
The next main risk events
- EUR ECB President Lagarde Speaks
- CAD CPI
- USD Core Durable Goods Orders
- USD Durable Goods Orders m/m
- USD CB Consumer Confidence
- USD New Home Sales
- USD Richmond Manufacturing Index
- AUD CPI
- EUR ECB President Lagarde Speaks
- GBP BOE Gov Bailey Speaks
- JPY BOJ Gov Ueda Speaks
- USD Fed Chair Powell Speaks
- EUR ECB President Lagarde Speaks
For more information and details see the TIOmarkets economic calendar.
Trade Safe!
Janne Muta
Chief Market Analyst
TIOmarkets
Tio Markets UK Limited is a company registered in England and Wales under company number 06592025 and is authorized and regulated by the Financial Conduct Authority FRN: 488900
Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.
DISCLAIMER: TIOmarkets offers exclusively consultancy-free service. The views expressed in this blog are our opinions only and made available purely for educational and marketing purposes and do NOT constitute advice or investment recommendation (and should not be considered as such) and do not in any way constitute an invitation to acquire any financial instrument or product. TIOmarkets and its affiliates and consultants are not liable for any damages that may be caused by individual comments or statements by TIOmarkets analysis and assumes no liability with respect to the completeness and correctness of the content presented. The investor is solely responsible for the risk of his/her investment decisions. The analyses and comments presented do not include any consideration of your personal investment objectives, financial circumstances, or needs. The content has not been prepared in accordance with any legal requirements for financial analysis and must, therefore, be viewed by the reader as marketing information. TIOmarkets prohibits duplication or publication without explicit approval.
Janne Muta holds an M.Sc in finance and has over 20 years experience in analysing and trading the financial markets.
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