ATFX foreign exchange market: according to the U.S. Department of Labor, the latest annual rate of core CPI in the United States in April was 3.5inchreeltoreeltape.6%, lower than the previous value of 35inchreeltoreeltape.8% 2 percentage points, setting a new low growth rate for the year. Nominal CPI annual rate data released at the same time, the latest value of 3.4%, lower than the previous value of 3.5%, the same as the expected value. Both the nominal CPI annual rate and the core CPI annual rate have declined, meaning that inflation in the United States has been shaken off.5inchreeltoreeltapeThe horizontal market concussion situation in the first quarter of this year, re-entered the rapid decline channel.
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After the release of the CPI data, the dollar index fell sharply in minutes, closing down 0.68% to as low as 104.28 points. While the dollar index fell, London gold and COMEX gold, non-US currencies and the three major US stock indexes all rose rapidly. Asian stock markets also performed strongly today. CPI data are suddenly cold, the Fed is less likely to maintain the current restricted high interest rates, and with the increase in dollar liquidity, stock markets around the world have access to more potential funds to enter the market. The dollar index depreciates because of the increase in the supply side of the dollar, gold and silver, non-US currencies and the dollar index have a "seesaw" relationship, which naturally takes advantage of the opportunity to appreciate.
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From the perspective of the US bond market, the yield on three-month Treasuries is 5.38%, which is higher than that on six-month bonds, and the yield on long-term and short-term bonds is upside down, which means that the Fed will cut interest rates within three to six months. Starting in May, the Fed will cut interest rates from August to November, only in September when the Fed has an interest rate resolution plan. Judging by this, the Fed will probably cut interest rates in September in the first month of the year.
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It is worth reminding that the yield difference between three-month and six-month Treasuries is only 0.03, or 3 basis points, less than the minimum 25 basis points of a single Fed rate cut. So there is a chance that the Fed will cut interest rates within three to six months, but not too high. The yield of six-month treasury bonds is 5.35%, and that of one-year treasury bonds is 5.11%. The difference between the two is 24 basis points, which basically reaches the range of a single interest rate cut by the Federal Reserve. So in addition to September, the Fed's first rate cut is likely to occur in November and subsequent months, this year alone, in November and December.
ATFX risk reminder, exemption clause, special statement: there are risks in the market, investment should be cautious. The above content only represents the personal views of analysts and does not constitute any operational suggestions. Please do not regard this report as the only reference. Analysts' views are subject to change at different times and are updated without notice.
[risk Tip] according to the relevant regulations on foreign exchange management, the buying and selling of foreign exchange shall be carried out at the trading venues prescribed by banks and other countries. Those who buy and sell foreign exchange privately, buy and sell foreign exchange in disguise, buy and sell foreign exchange or illegally introduce a large amount of foreign exchange shall be subject to administrative punishment by the foreign exchange control agency in accordance with the law.5inchreeltoreeltapeIf the case constitutes a crime, criminal responsibility shall be investigated in accordance with the law.
