The US CPI will give direction to the Fed

The Consumer Price Index (CPI) is a broad measure of inflation within an economy in relation to the cost of goods and services. That figure can have a significant impact on the value of a currency in relation to the currencies of other nations.

For now, US stock futures were flat on Wednesday as investors braced for a key inflation report that could influence the Federal Reserve's upcoming interest rate decision. Futures contracts linked to the three major indices were all trading near breakeven. Disney, Roblox, and Robinhood, among others, will report earnings today 11th.

INDICES

The Dow Jones closed down more than 50 points on Tuesday, while the S&P 500 and Nasdaq fell 0.5% and 0.6%, respectively, as investors await an update on price ceiling negotiations. debt and inflation data to be released tomorrow. The next CPI report is expected to show inflation remained elevated with the monthly rate rising 0.4% and the headline number remaining at 5%. Meanwhile, President Biden will meet with House Speaker Kevin McCarthy today 11th with the goal of breaking a deadlock. Yesterday, Treasury Secretary Janet Yellen said that not raising the debt ceiling would be an “economic catastrophe.” On the corporate front, Palantir jumped 23.4% after reporting strong earnings. Besides, Novavax surged 27.8% after the drugmaker revealed 25% job cuts and positive vaccine data. By contrast, Skyworks Solutions fell 5.1% after projecting current quarter revenue and profit to be below estimates and Paypal fell 12.7% after the company cut its margin forecast.

COMMODITIES

COAL: Newcastle coal futures, the benchmark for Asia's biggest coal-consuming region, fell below $170 per tonne, the lowest level since January 2022 on higher output and weak demand offshore. from China. China's coal production increased 5.8% year-on-year to 734.23 million tonnes in January-February 2023 as the government encouraged miners to boost output. Furthermore, India produced a record 73.02 million tons of coal in April 2023, up 8.67% year-on-year, reducing reliance on imports. However, after a fatal accident in Inner Mongolia, China temporarily suspended operations at 32 coal production sites in the region to carry out nationwide safety checks. Despite an increase in clean power generation, coal accounted for 64% of China's first-quarter 2023 electricity generation. By contrast, the EU burned less coal and gas from October 2022 to March 2023, with coal generation down 11% year-on-year and gas generation down 38 terawatt hours.

FOREIGN EXCHANGE

AUSTRALIAN DOLLAR: The Australian dollar appreciated as much as $0.68, hitting its highest levels in three weeks, as the Reserve Bank of Australia unexpectedly raised the cash rate by 25 basis points to 3.85% at its policy meeting. of May. The central bank defied market expectations for a prolonged pause, saying domestic inflation was still too high and further tightening may be required to ensure inflation returns to target within a reasonable time frame. The latest data showed that the annual inflation rate in Australia rose to 7% in the three months to March, slowing from a 30-year high of 7.8% in the previous quarter, but holding at historically high levels.

Chilean peso: After resisting at $800 pesos, we continue to see the decline of the Chilean peso dollar, which continues to decline and appreciate after the elections on Sunday, closing yesterday at levels of $788 and most likely looking for a break in the great support of the $786 that we have been monitoring for some time and that has been equalized with the average of 200 periods in weekly charts but that the downward pressure from the average of 20 periods in this time frame continues to push downwards and if not break this average, on weekly charts, we would not see a turnaround for the currency. For now, we are waiting for the break of this great support that could open the way to the $775-$770 zone, which would be the new support zone for the peso. While on Friday we saw inflation data, for Chile, lower than expected, which is giving light that the BC could generate a decrease in rates, but we must wait and be attentive to how the United States is coming. However, in Chile, we should see deflation as the dollar is down more than 20% and fuel internationally has fallen more than 40%, which does not justify fuel values today 11th in Chile.

CRYPTO MARKET

The Bitcoin continues to fall and with many chances that it will break the support of $27,000 usd and that it can go looking for new targets at levels of $26,500 first and $26,000, but it does not leave the possibility of an even stronger breakout that could lead to the asset at levels of $25,000 usd. However, there is concern in the cryptocurrency since there is a lack of programmers who are in charge of updating and validating