• Bitcoin still climbing this CPI week; up over 2%/$1,600 since Sunday
     
  • US400 and RUS2000 stock indices showed larger-CPI reactions, as predicted
     
  • FXTM Trading Signals: EURGBP reaches all 4 Targets

 

 

The monthly US CPI release has come and gone.

The highly-anticipated set of US economic data exceeded market expectations by 0.1 percentage points each:

  • Headline CPI in March 2024 vs. March 2023 (year-on-year): 3.5%
    Higher than the forecasted 3.4%; higher than February’s 3.2% year-on-year figure
     
  • Headline CPI in March 2024 vs. February 2024 (month-on-month): 0.4%
    Higher than the forecasted 0.3%; higher than February’s 0.4% month-on-month figure
     
  • Core CPI (excluding food and energy prices) year-on-year: 3.8%
    Higher than the forecasted 3.7%; matching February’s 3.8% year-on-year figure
     
  • Core CPI month-on-month: 0.4%
    Higher than the forecasted 0.3%; matching February’s 0.4% month-on-month figure

The higher-than-expected CPI numbers pushed back bets that the Fed can cut US interest rates as soon as June 2024.

 

As we’d written about extensively, this CPI numbers certainly jolted various asset classes on Wednesday, April 10th.

Now, we look back at a couple of instruments that performed as per outlined in our recently published Daily Market Analysis articles:

 

 

1) Bitcoin still rising so far this CPI week

What we wrote:

So far in 2024, cryptos have risen every week that the highly-anticipated US inflation data is released!

(Trade of the Week: Cryptos to rise again this CPI week?; published Monday, April 8th)

 

What’s happened since?

At the time of writing, Bitcoin has risen by over 2% (or about $1600) so far this week since Sunday’s closing price of $69,315.13.

Even though other risk assets (such as stocks) fell after the hotter-than-expected US CPI, Bitcoin managed to rebound after its own initial post-CPI selloff.

 

If Bitcoin can continue shrugging off the US CPI’s impact and adhere to this trend of posting a weekly advance for each week so far in 2024 that has featured a US CPI announcement, that could translate into further gains for Bitcoin bulls for the rest of this week.

Still, the astute trader would note the stubborn resistance region around $71,400 which has capped Bitcoin's upside since week of March 25th.

The world's oldest crypto has to vanquish the $71,400 resistance in order to have another shot at posting a new record high.

 

 

 

2) US400 and RUS2000 indices saw massive post-CPI moves

What we wrote:

“On CPI days, the US400 typically sees a 39% larger-than-average move, which translates into 13 index points higher than average (average: 34 index points).”
 

“On CPI days, the RUS2000 typically sees a 27.8% larger-than-average move, which translates into 7 index points higher than average (average: 25 index points).”
 

" ... stock markets may be pulled back lower if US inflation is proving stubborn, ..."

(“Smaller” US stock indexes, bigger CPI reactions?; published Tuesday, April 9th)

 

What’s happened since?

  • US400

This mid-sized US stock index posted a 93.8 index point difference between its highest and lowest traded prices in the 1 hour immediately following the US CPI release.

Those 93.8 index points are almost 3x the average daily intraday difference (highest price – lowest price) of 34 index points over the past 12 months.

 

  • RUS2000

This "small" US stock index posted a 86 index point difference between its highest and lowest traded prices in the 1 hour immediately following the US CPI release.

Those 86 index points are MORE THAN TRIPLE the average daily intraday difference (highest price – lowest price) of 25 index points over the past 12 months.

 

Given that massive post-CPI move downwards for US stock indices, as was expected in light of the hotter-than-expected US inflation data …

This would’ve been a major payoff for those who had “short” positions (bet that prices would go down) on either the US400 or RUS2000 stock indices!

 

 

 

3) FXTM Trading Signals: EURGBP bags over 100 points

Every week day, we publish the FXTM Trading Signals twice daily:

  • EU session: 6:00AM GMT
     
  • US session: 12:30PM GMT

This EURGBP signal, published just today (Thursday EU session), has already reached all 4 Targets!

NOTE: FXTM Trading Signals are available for clients under the MyFXTM portal (published within the Trading Services section)

 

FXTM Signal: EURGBP M15 - how it started ...

 

FXTM Signal: EURGBP M15 - how it ended ...

 

But wait, there could be more volatility ahead for EURGBP!

The European Central Bank (ECB) is due to announce its policy decision at 12:15PM GMT later today (Thursday, April 11th)

To be clear, markets roundly expect the ECB to leave its benchmark rates unchanged at its record high of 4%.

However, markets will be keen to find out if the ECB is now more certain about CUTTING its benchmark rates by 25-basis points in June 2024.

Such clues may be derived out of ECB President Christine Lagarde’s press conference due at 12:45PM GMT, which is 30 minutes after the ECB’s policy announcement.

 

EURGBP: Potential Post-ECB Scenarios

  • If President Lagarde lends further credence to the thought of a June rate cut by the ECB, that could prompt EURGBP to revisit the 0.8550 level.
     
  • However, if President Lagarde unexpectedly pushes back against bets for a June rate cut, that should trigger a greater rebound for EURGBP back above the 0.8570 line.

 

 

 

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