📰 A Day of Positioning – All Eyes on U.S. CPI
🧭 U.S.-China Trade Talks: Smooth on the Surface, But Doubts Remain
The two-day U.S.-China trade negotiations concluded with a nominal agreement to implement the Geneva framework. However, U.S. Commerce Secretary Ratnick emphasized that resolving the rare earth export issue must come first, clearly pushing for concessions from China. As a result, no substantial progress was observed.
👉 Markets remained calm, showing no overreaction to the talks.
It appears that investors have grown accustomed to the idea that “no progress is the baseline expectation.”
🔍 Main Focus Today: U.S. Consumer Price Index (CPI)
The CPI remains a key gauge for the Fed’s monetary policy outlook.
Inflation is expected to remain “sticky,” which may lead to heightened volatility.
📈 Market Expectations (YoY / MoM):
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Headline CPI (YoY): +2.4% (previous +2.3%)
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Core CPI (YoY): +2.9% (previous +2.8%)
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Headline CPI (MoM): +0.2% (previous +0.2%)
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Core CPI (MoM): +0.3% (previous +0.2%)
📌 If inflation surprises to the upside, it may trigger dollar buying and risk-off sentiment.
If inflation slows, easing expectations could drive risk-on behavior.
📊 Economic Events Today:
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🇪🇺 ECB Wage Tracker (Q1)
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🇺🇸 MBA Mortgage Applications (May 31–June 6)
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🇲🇽 Mexico Industrial Output (April)
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🇨🇦 Canada Building Permits (April)
🗣 Scheduled Speeches & Announcements:
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ECB officials: Lane, Makhlouf, Cipollone
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UK Government: Spending review proposal
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🇺🇸 U.S. 10-year Treasury auction: $39 billion
💬 Trading Strategy:
The U.S.-China trade talks have been interpreted as a “non-event.”
Today, CPI is expected to be the major market catalyst.
Best to stay patient and assess post-release market reactions before making any trading decisions.
📌 Summary:
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U.S.-China talks ended as expected → priced in
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Market focus is entirely on CPI → increased sensitivity to surprises
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A wait-and-see atmosphere dominates → major trend direction likely to emerge after the CPI release
