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Markets brace for US inflation week
Markets await Wednesday’s CPI, expected at 2.7%, amid Fed rate cut expectations.
Currencies: The dollar steadies; Aussie and Kiwi rally on China’s monetary policy shift.
Cryptocurrencies: Bitcoin dips as Mt. Gox distribution fears linger.
Oil: Prices climb 1%+ on China’s policy easing signals; WTI near $67.83, Brent at $71.63.
Currencies
The dollar traded within a narrow range this morning as markets largely priced in a quarter-point rate cut by the Federal Reserve next week. Investors are now focused on Wednesday's CPI data, which is expected to show an increase to 2.7% from 2.6% in October.
The Australian and New Zealand dollars surged following China's announcement of a monetary policy adjustment. The euro was higher up near 1.0577 while the USD/JPY continued to range near 150.38.
Cryptocurrencies
Bitcoin edged lower on Monday, easing off a weekend rally as markets looked for further signals on cryptocurrency policy under incoming U.S. President Donald Trump.
Investor sentiment was also dampened by concerns over potential distributions from the defunct Mt. Gox exchange. A wallet linked to Mt. Gox transferred over $2 billion worth of Bitcoin last week, a move often seen as a precursor to distribution events. The exchange still holds billions of dollars in Bitcoin slated for repayment to creditors.
Commodities
Oil prices rose over 1% on Monday after China, the world’s largest oil importer, signaled its first steps toward easing monetary policy since 2010 to stimulate economic growth, according to state media reports.
China's economic slowdown influenced OPEC+'s decision last week to delay its planned output increase until April. WTI was steady near $67.83 while Brent was pinned near $71.63.
Gold prices rose higher today supported by safe-haven demand amid geopolitical tensions in Syria and South Korea.
The yellow metal has seen a subdued performance in recent weeks, as rising geopolitical risks were balanced by uncertainty over U.S. interest rates. This environment has led traders to favor the dollar and Treasuries over gold.
