It’s all about US CPI

Another downside surprise for the second month in a row as US inflation moves lower faster than widely expected by the market. Analysts forecasted 7.3% YoY inflation; however, the data showed a 7.1% year-on-year increase. Core CPI month-over-month also came lower at 0.2% vs. the 0.3% estimated for November, seeing prices on goods return to near pandemic price levels.

It will be interesting to see if the Federal Reserve will soften its touch on interest rates as the measures, they have implemented over 2022 are starting to take effect. But the Fed might want to see more proof of inflation moving lower than anticipated as the Fed interest rate decision looms.

The benchmark Index, the S&P 500, and other US Indices moved higher after the announcement, with the significant US Treasury yields lower along with the Greenback. This may change with further news coming in the week concerning the FOMC meeting.

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