Eyes on CPI | Morning Express | 11/10/2022
Posted: Nov. 10, 2022, 9 a.m.
Breaking: Headline CPI +0.4% vs +0.6% and +7.7 YoY vs +8.0%. Core CPI +0.3% MoM vs +0.5% expected and +6.3% YoY vs +6.5%
E-mini S&P (December) / NQ (December)
S&P, yesterday’s close: Settled at 3755.50, down 79.75
NQ, yesterday’s close: Settled at 10,830.75, down 263.50
Fundamentals: The October CPI report is due at 7:30 am CT. Analysts expect headline inflation to increase month-over-month by +0.6%, a four-month high, but the Cleveland Fed Inflation Nowcast expects +0.76%. As for year-over-year, it is expected at 8.0% by analysts, down from 8.2% in September, and at 8.09% by the Cleveland Fed. Core inflation, excluding food and energy, is expected to climb 0.5% and 0.54% month-over-month and +6.0% year-over-year by analysts and +6.58% by the Cleveland Fed. It is important to note the Fed’s expectations have tended to be on the higher-end than the actual print in recent months. This is reasonable because inflation has been trending higher throughout the year. This is also seen by the Fed being behind the curve. The market is likely to react more closely to analysts, but if it stays within in range, Cleveland’s expectations could be a catalyst in opening the door for a rally from lower, like what happened in July (for June’s CPI) and October (for September’s). Similarly, the market is flirting with this lower-bound range, as referenced yesterday by Bill Baruch on the CNBC’s Halftime Report, therefore, risks can be skewed to the upside. Of course, if inflation comes in below expectations, we expect a rally to take hold in what could be the start of the Midterm Election trend. Remember, the S&P has never been lower six and 12 months out after the Midterms. Furthermore, it was only lower once after three months, in 2002 through the start of February 2003 it was down 7.8%.
Bill Baruch joined Kitco’s David Lin to talk markets on Monday.
Weekly Initial Jobless Claims are also due at 7:30 am CT. Philadelphia Fed President Harker, a 2023 voter, speaks at 8:00 am CT, Cleveland Fed President Mester, a 2022 voter, speaks at 11:30 am CT, Kansas City Fed President George, also a 2022 voter, speaks at 12:30 pm CT, and NY Fed President Williams, a permanent voting seat, speaks at 5:35 pm CT. The U.S. Treasury will auction $21 billion in 30-year bonds at noon CT.
Technicals Premium
🔒 You need to be a Premium User to unlock this content. Click here to unlock.
Levels Premium
🔒 You need to be a Premium User to unlock this content. Click here to unlock.
NQ (December)
Levels Premium
🔒 You need to be a Premium User to unlock this content. Click here to unlock.
Crude Oil (December)
Yesterday’s close: Settled at 85.83, down 3.08
Fundamentals: Crude Oil is jumping, along with other risk-assets, after CPI came in lighter than expected. Prices were under pressure over the last 48 hours as hopes of China’s reopening were dampened due to the ongoing rise in virus cases. Then yesterday’s EIA report was bearish as the White House unladed another 3.5 mb of SPR. We maintain that this will not end well.
Technicals Premium
🔒 You need to be a Premium User to unlock this content. Click here to unlock.
Levels Premium
🔒 You need to be a Premium User to unlock this content. Click here to unlock.
Gold (December) / Silver (December)
Gold, yesterday’s close: Settled at 1713.7, down 2.3
Silver, yesterday’s close: Settled at 21.327, down 0.175
Fundamentals: After today’s soft CPI, Gold has surged to the highest level since September 12th, the day before the hot August CPI report, and Silver to the highest since June 21st. Precious metals have been on a tear of late, and Platinum is hitting its highest since March. The softer CPI read finally gives the Federal Reserve some wiggle room and could suppress expectations for the terminal rate back below 5%. It is no surprise the U.S. Dollar is lower on the news, and like the inverse of Gold, it is at the lowest level since its September 13th CPI rally. The 10-year yield is retesting what has become a floor at 3.90% going back about a month. We now await what Federal Reserve speakers have to say. Philadelphia Fed President Harker, a 2023 voter, speaks at 8:00 am CT, Cleveland Fed President Mester, a 2022 voter, speaks at 11:30 am CT, Kansas City Fed President George, also a 2022 voter, speaks at 12:30 pm CT, and NY Fed President Williams, a permanent voting seat, speaks at 5:35 pm CT. The U.S. Treasury will auction $21 billion in 30-year bonds at noon CT.
Technicals Premium
🔒 You need to be a Premium User to unlock this content. Click here to unlock.
Levels Premium
🔒 You need to be a Premium User to unlock this content. Click here to unlock.
Silver (December)
Levels Premium
🔒 You need to be a Premium User to unlock this content. Click here to unlock.
In case you haven't already, you can sign up for a complimentary 2-week trial of our complete research packet, Blue Line Express.
Sign up for a Free Trial
Start Trading with Blue Line Futures
Don't have an account with Blue Line Futures?
Futures trading involves substantial risk of loss and may not be suitable for all investors. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. Trading advice is based on information taken from trade and statistical services and other sources Blue Line Futures, LLC believes are reliable. We do not guarantee that such information is accurate or complete and it should not be relied upon as such. Trading advice reflects our good faith judgment at a specific time and is subject to change without notice. There is no guarantee that the advice we give will result in profitable trades. All trading decisions will be made by the account holder. Past performance is not necessarily indicative of future results.
Blue Line Futures is a member of NFA and is subject to NFA’s regulatory oversight and examinations. However, you should be aware that the NFA does not have regulatory oversight authority over underlying or spot virtual currency products or transactions or virtual currency exchanges, custodians or markets. Therefore, carefully consider whether such trading is suitable for you considering your financial condition.
With Cyber-attacks on the rise, attacking firms in the healthcare, financial, energy and other state and global sectors, Blue Line Futures wants you to be safe! Blue Line Futures will never contact you via a third party application. Blue Line Futures employees use only firm authorized email addresses and phone numbers. If you are contacted by any person and want to confirm identity please reach out to us at info@bluelinefutures.com or call us at 312- 278-0500
Like this post? Share it below:
Back to Insights
In case you haven't already, you can sign up for a complimentary 2-week trial of our complete research packet, Blue Line Express.
Free Trial