π° A Day of Positioning β All Eyes on U.S. CPI
π§ 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.
π 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.”
π Main Focus Today: U.S. Consumer Price Index (CPI)
The CPI remains a key gauge for the Fedβs monetary policy outlook.
Inflation is expected to remain βsticky,β which may lead to heightened volatility.
π 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%)
π 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.
π Economic Events Today:
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πͺπΊ ECB Wage Tracker (Q1)
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πΊπΈ MBA Mortgage Applications (May 31βJune 6)
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π²π½ Mexico Industrial Output (April)
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π¨π¦ Canada Building Permits (April)
π£ 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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πΊπΈ U.S. 10-year Treasury auction: $39 billion
π¬ Trading Strategy:
The U.S.-China trade talks have been interpreted as a βnon-event.β
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.
π Summary:
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U.S.-China talks ended as expected β priced in
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Market focus is entirely on CPI β increased sensitivity to surprises
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A wait-and-see atmosphere dominates β major trend direction likely to emerge after the CPI release
