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General Market Analysis | 12 September 2023

Stocks Steady Ahead of Data

Asian stock markets had a relatively steady day ahead of key inflation data out of the US after seeing their contemporaries in the US start of the week in good form. The Nasdaq had led the way higher in the US session, adding 1.2% on the day followed by the S&P, up 0.67% and the Dow 0.25%. The dollar had taken a beating yesterday, losing over 0.6% against a basket of currencies after moves in China and Japan strengthened their currencies, however, it still remains trading near highs ahead of tomorrow’s CPI numbers. Oil also remains strong with the WTI trading just shy of $88 and Brent above $91 and Gold dropped lower whilst still remaining in familiar ranges.

CPI Data Key for Investors this Week

There has been increased volatility in the markets already this week ahead of the key CPI data out of the US, but some traders are seeing these moves as necessary corrections in a market that has been pricing in interest rates remaining higher for longer in the states. Core CPI is expected to show a monthly increase of 0.2% with the overall CPI up 0.6%. If the numbers print in line with expectation or higher then traders are looking to see more of the recent trend from the last weeks trading with US treasury yields moving higher, the dollar remaining strong and stocks under pressure. Anything well under expectations should see more volatility as markets adjust ahead of this months Fed meeting in 8 days’ time.

UK Employment Figures in Focus Today

The macroeconomic event calendar starts to warm up today with employment figures in the UK the focus for many traders. It has been a relatively quiet start to the day with NAB Business confidence numbers in Australia coming out largely in line with expectations, however the key employment numbers due out early in the London session could see some increased volatility in the pound and sterling markets. Expectation is for the claimant count to rise by 17k and for the unemployment rate to lift to 4.3%, however anything significantly off expectation could see the pound move hard and fast. There is little of note due out in the US session but expect further market adjustments ahead of tomorrows inflation numbers.