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Inflation hits 7% and is nearing peak, stocks whip around, dollar falls, bitcoin rises

US stocks initially rallied after the latest reading of consumer prices showed the biggest gains since 1982, but was nevertheless, in line with expectations. Wall Street was worried that a much hotter inflation report could have not only cemented four Fed rate hikes this year, but potentially made the May FOMC meeting a possibility for when the balance sheet runoff could start. Inflation is not slowing down just yet, but the peak is getting close. Today’s inflation report does two things, it

12-01-2022 12:43 GMT by Edward Moya

Euro jumps to 2-month high after US CPI

The euro has jumped on the currency bandwagon, as the US dollar is in broad retreat. In the North American session, EUR/USD is trading at 1.1438, up 0.63% on the day.

12-01-2022 12:31 GMT by Kenneth Fisher

Surging Canadian dollar hits 8-week high

Canadian dollar climbs despite high US inflation The Canadian dollar continues to flex its muscles, as USD/CAD has dropped to an 8-week low. The pair is pressing very close to the 1.25 line, which has psychological significance. With everybody talking about inflation, including Fed Chair Jerome Powell, today's US CPI report for December could well have been the highlight of the week.

12-01-2022 11:24 GMT by Kenneth Fisher

UK100 - From strength to strength

Further to run? The UK100 has been going from strength to strength in recent weeks, relatively undeterred by the wobble in broader stock markets over the last week or so as it eyes January 2020 highs above. It's already back in pre-pandemic territory and the momentum indicators on both the daily and 4-hour charts continue to look healthy. That may suggest resistance around 7,560 is looking a little vulnerable, with the next big test above coming around 7,700. Ultimately, the ability to achi

12-01-2022 10:51 GMT by Craig Erlam

Oil rally continues, gold choppy

Fundamentals remain bullish for crude Oil prices are trading back around their highest levels since late October after another surge on Tuesday. The rally continues as OPEC continues to miss output targets and Libya reportedly struggles to ramp up production again.

12-01-2022 10:44 GMT by Craig Erlam

Risk back on?

Stock markets remain in positive territory on Wednesday after a reassuring appearance from the Chairman of the Federal Reserve and some inflation data. Jerome Powell put in a decent performance on Tuesday but sentiment is clearly very fragile and it may not take much to tip investors over the edge again. Three rate hikes are now heavily priced into the markets this year, with balance sheet reduction perhaps starting in the third quarter. While investors could get on board with that, the situat

12-01-2022 10:39 GMT by Craig Erlam

Aussie snoozes as mini-rally fizzles

The Australian dollar is almost unchanged on Wednesday as it trades just above the 0.72 level. On Tuesday, the Aussie posted strong gains of 0.51%, its best daily performance in a week.

12-01-2022 07:41 GMT by Kenneth Fisher

Oil and gold rally after Powell remarks

Oil prices leap higher after Powell testimony Oil prices rocketed higher overnight as the Powell testimony removed the threat of early rate hikes, for now, allowing the fundamentals of constrained OPEC+ production, and an omi-gone variant recovery, to reassert themselves with a vengeance. Brent crude rocketed 3.25% higher to USD 83.60 a barrel, while WTI leapt 3.65% higher to USD 81.25 a barrel.

12-01-2022 05:35 GMT by Jeffrey Halley

Risk sentiment recovery pushes dollar lower

Powell testimony weighs on US dollar The Powell-inspired risk sentiment rally overnight saw US yields edge lower and weighed heavily on the US dollar, which staged a broad retreat. The dollar index fell 0.36% to 95.60, just above support at 95.50.

12-01-2022 05:28 GMT by Jeffrey Halley

Asian equities jump on Wall Street rally

Powell remarks boost Wall Street, Asia follows The soothing words of Jerome Powell overnight unleashed anxiously waiting, but side-lined buyers, resulting in a strong overnight recovery by Wall Street. Mr Powell noted that the Fed could hike rates to rein in inflation, planned to start the balance sheet run-off sooner rather than later, but also said inflationary pressures would peak mid-year. What he didn’t say was also important.

12-01-2022 05:04 GMT by Jeffrey Halley

Jerome and the three bears

Powell testimony soothes markets Federal Reserve Chairman Jerome Powell, testifying at his confirmation hearing on the Hill, soothed markets overnight in a performance worthy of Goldilocks and the Three Bears. Mr Powell noted that the Fed could hike rates to rein in inflation, intended to start the balance sheet run-off sooner rather than later, but also said inflationary pressures would peak mid-year.

12-01-2022 04:52 GMT by Jeffrey Halley

Market Insights Podcast (Episode 281)

OANDA Senior Market Analyst Craig Erlam previews the day's market news with Jonny Hart. This morning they discussed the market reaction to Jerome Powell's testimony and today's US CPI data.

12-01-2022 03:13 GMT by Craig Erlam

US Close: Markets embrace lengthy Balance Sheet runoff debate, Fed readies March hike

US stocks went on a rollercoaster ride after Fed Chair Powell’s testimony signaled that the Fed “in all likelihood” will be normalizing policy, while allowing the balance-sheet runoff later this year. The Fed sees inflation lasting till mid-2022 and that is probably when they will let the balance sheet decline. Wall Street now has a better understanding on how the Fed will normalize policy and with the balance runoff likely taking up to four meetings.

11-01-2022 14:11 GMT by Edward Moya

Commodities and Cryptos: Oil rallies Gold Shines, Bitcoin higher

Oil Crude prices rallied alongside risky assets after Fed Chair Powell signaled a lengthy debate over the balance sheet runoff. A long road to normal means the economy will still see a lot of support over the first half of the year and that is good news for crude prices. Oil prices seem poised to trade between $80 and $100 a barrel as the global demand outlook still looks upbeat as most major economies are getting closer to the other side of the omicron fence. NY Gov Hochul said, COVID rates

11-01-2022 14:11 GMT by Edward Moya

NAS100 - Correction complete?

Or further to go? It's been a shaky start to the new year, with interest rate anxieties dragging on sentiment and hitting the NAS100 particularly hard. The index fell more than 8% over the last week, breaking through key support in the process which could have led to a much deeper correction. Instead, the index bounced strongly in the final hours of trading on Monday and failed to close below the rising channel. While a deeper correction could still be on the cards, the false breakout - as

11-01-2022 12:32 GMT by Craig Erlam

Yen dips, inflation expectations rise

After several days of gains, the Japanese yen has reversed directions and is in negative territory. In the North American session, USD/JPY is trading at 115.48, up 0.23% on the day. Japanese consumers expect higher inflation The Japanese government is committed to an ultra-easy monetary policy, but it will need stronger consumer spending if it hopes to kickstart the economy.

11-01-2022 10:56 GMT by Kenneth Fisher

Oil rebounds, gold holds above 1800

Oil eyes Autumn highs Oil prices are rebounding higher again on Tuesday, up more than 1%, and with sights seemingly set on the late autumn highs. We saw some heat come out of the market over the last couple of days but pullbacks were always likely to be limited given the broader dynamics. Of course, omicron offers some demand uncertainty over the coming months but the market is tight as OPEC+ slowly turns the taps back on.

11-01-2022 10:00 GMT by Craig Erlam

The start of the fightback?

Stock markets are enjoying some reprieve after a rocky start to the week and investors will be hoping earnings season provides more cause for optimism in the weeks ahead. The January blues are alive and well and with markets now eyeing up the possibility of four rate hikes this year, we may be approaching peak fear just in time for earnings season. We've quickly pivoted from the transitory inflation narrative to aggressive tightening including a combination of accelerated tapering, multiple rat

11-01-2022 09:41 GMT by Craig Erlam

Aussie yawns after retail sales jump

The Australian dollar continues to have a quiet week and is unchanged in Tuesday trade. In the European session, AUD/USD is trading at 0.7170. Australia's retail sales soar Australian consumers opened their purse strings in November, as retail sales jumped 7.3%, well above the consensus of 3.6%.

11-01-2022 09:25 GMT by Kenneth Fisher

Euro calm, warning from Bundesbank

It continues to be quiet week for the euro, which is trading around 1.1340 in the European session. The currency markets are nervous and continue to be marked by range trading.

11-01-2022 07:37 GMT by Kenneth Fisher

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