Market Turmoil Following Trump’s Remarks – U.S. CPI Report in Focus Today!

Market Turmoil Following Trump’s Remarks – U.S. CPI Report in Focus Today!

All eyes are on the U.S. Consumer Price Index (CPI) report today.
Trump’s recent statements have disrupted market sentiment, but if CPI deviates significantly from expectations, the U.S. dollar could see major moves.

Market Overview & Key Focus Areas

U.S. Dollar (USD)

• Trump did not dismiss the possibility of a U.S. recession → Market shifts towards risk-off sentiment
• However, later remarks stating “the risk of a recession is low” caused market confusion
• The direction of the U.S. dollar will be determined by today’s CPI data

 Today’s U.S. CPI Forecasts:

• YoY: +2.9% (Previous: +3.0%)
• Core YoY: +3.2% (Previous: +3.3%)
• MoM: +0.3% (Previous: +0.5%)
• Core MoM: +0.3% (Previous: +0.4%)

 If CPI meets or falls below expectations → Continued dollar weakness
 If CPI exceeds expectations → Dollar buying & reduced Fed rate-cut expectations

Euro (EUR)

• Germany’s defense spending legislation under scrutiny
• Yesterday’s remarks from the Green Party added uncertainty to the euro’s movement
• The ECB Watcher’s Conference today may provide hawkish or dovish signals

 The euro will likely move based on the U.S. CPI results, following dollar-led trends!

Canadian Dollar (CAD)

• Bank of Canada (BOC) policy rate decision today (Market expects a 25bps rate cut to 2.75%)
• Governor Macklem’s comments could trigger major CAD movements

 If BOC delivers a hawkish tone, CAD may strengthen!

GOLD (XAU/USD)

• Direction depends on U.S. CPI results
• If inflation slows, expectations of Fed rate cuts rise, boosting GOLD
• If CPI beats forecasts, expect dollar buying & GOLD selling

 Look for potential short-term dip-buying opportunities!

Key Economic Events Today

 The U.S. CPI report is today’s most critical event!

Summary & Trading Strategy

• The U.S. dollar’s direction hinges on the CPI report at 21:30
• Higher-than-expected CPI → USD bullish, GOLD bearish
• Weaker-than-expected CPI → USD bearish, GOLD bullish
• The Bank of Canada (BOC) rate decision & Governor Macklem’s speech are also key events

 Core Strategy:
 If CPI meets or falls below expectations: → Short USD, Buy GOLD, Short USD/JPY
 If CPI exceeds expectations: → Long USD, Short GOLD, Long USD/JPY

 Markets will move based on CPI! Stay alert and follow the post-release momentum!