Overnight Wall St gained a third consecutive day with Dow up 229pts to 32,381, S&P500 gained +1.06% to 4110 and Nasdaq +1.27% to 12,266 ahead of CPI print tonight.
Gold up slightly to $1724, Crude +1.44% to $88 as DXY tumbled to 108.3 and AUD signals risk on to close in on 69c.
XLE was up +1.84%, GDX +1.39%, GDXJ +2.02%.
Y-o-y CPI for Aug is expected to be 8.1% down from 8.5% while CPI m-o-m is expected to be -0.1% from 0%
Good chance for CPI to align with expectations if trend is anything to go by. Market is expecting 75bps regardless of CPI unless CPI cools significantly.
Risk on sees stocks, commodities, and high-beta FX gain but bonds dip after poor auctions ahead of CPI - Newsquawk US Market Wrap
TUESDAY, SEP 13, 2022 - 06:07 AM
SNAPSHOT: Equities up, Treasuries down, Crude up, Dollar down.
REAR VIEW: Poor 3y and 10yr auctions; NY Fed consumer inflation expectations see chunky declines; GS preparing for layoffs; US planning to broaden curbs on chip sales to China; AXP and BAC sanguine on consumer spending; Weak UK data.
COMING UP: Data: UK jobs, German ZEW, US CPI Supply: Italy, US.
WEEK AHEAD PREVIEW: Highlights include US CPI; China activity data; Shanghai meeting; UK data dump.
CENTRAL BANKS WEEKLY: Reviewing ECB, BoC, RBA.
MARKET WRAP
Stocks were firmer on Monday as participants position into Tuesday's CPI, accompanied by a softer Dollar and broader risk appetite. There was an earlier outperformance towards tech stocks (NDX > SPX) amid the fall in yields, although that unwound into the close as bonds dipped back lower after very-poor 3yr and 10yr auctions from the Treasury. Aside from the poor auctions, traders very much have their eyes on the inflation data due Tuesday, with some hopes that another soft print could be further evidence towards a downward trend. While some Fed officials have said the August CPI won't alter the Fed's decision on a 75bps September hike, any upside prints do risk skewing the distribution of outcomes towards more aggressive tightening paths going into year-end. Meanwhile, policymakers will have cheered to see the latest NY Fed consumer inflation expectation gauges Monday falling to 10-month and two-year lows in the 1yr ahead and 3yr ahead gauges, respectively - an incremental assurance of 'anchored' inflation expectations. For corporates, reports suggested Goldman Sachs (GS) is set to resumed layoffs amid a slowdown in dealmaking, although commentary on regional banks was more sanguine after US Bancorp (USB) announced positive revenue/NIM trends, although warned its mortgage revenue was down Y/Y. Meanwhile, American Express (AXP) and Bank of America (BAC) both gave positive commentary on the state of the consumer, with the former saying it isn't seeing any significant signs of weakness across its business.
