Industrial Forex: CPI cools down more than expected! Gold rose nearly $15 in the short term

At 8:30 p.m. Beijing time on Wednesday, the latest U.S. June CPI data fell more than expected.The U.S. CPI recorded an unseasonally adjusted annual rate of 3.0% in June., the smallest increase since March 2021, returning to the "3 era";The core CPI returns to the "4 prefix".，The non-quarterly core CPI recorded an annual rate of 4.8%, the lowest since November 2021。

In addition, this is also the 12th consecutive month that the overall CPI growth rate has declined year-on-year, the longest in history.

After the release of the US CPI data, spot gold rose by nearly $15 in the short term and then fell back; silver rose by more than 1% in the day; the US dollar index regained some losses after a short-term plunge of 40 points.

COMEX most active gold futures contract Beijing time on July 12 20:30 within one minute trading disk instantly traded 5802 lots, the total value of the transaction contract 1.128 billion US dollars;

COMEX most active gold futures contract Beijing time on July 12 20:31 within one minute trading disk instantly traded 2784 lots, the total value of the transaction contract 541 million US dollars;

COMEX most active gold futures contract Beijing time on July 12 20:32 a minute trading disk instantly traded 2270 lots, the total value of the transaction contract 442 million dollars.

Although this data is unlikelyStop the Federal ReserveA 25 basis point rate hike later this month, but that could start to add up to what will be this cycleThe last step to raise interest ratesPossibility.

U.S. interest rate strategist Ira Jersey said the lower-than-expected core and headline CPI data may not change the Federal Reserve's policy in July, but given the current price trend,The second rate hike is indeed in doubt.

Swap transactions still believe,Fed hikes 25 basis points this month is almost a DingTalk on the boardBut theyThe estimate for the peak federal funds rate in this cycle has been cut to just under 5.4%.This change in pricing means that,Traders now see a much lower 50 per cent chance of the Fed raising rates again after an expected one this month.

The breakdown data shows that,Used car prices did soften in JuneThese factors are thought to be one of the fundamental reasons why inflation has remained so stubborn. Airfare prices have also fallen, which is surprising given the strong demand for travel this summer.

The items that rose in June included housing, auto insurance, clothing, entertainment, and personal care.Inflation in the service sector remains very challenging。

Charles Schwab UK managing director Richard Flynn said lower inflation could boost investor optimism, but heWe are still closely monitoring the pace of inflation changes。

Although inflation is gradually decreasingIt is still well above the Federal Reserve's 2% targetCore CPI has fallen sharply from its peak, but strong consumer spending in services such as airline tickets has slowed efforts to curb price risesOverall, heInflation is expected to remain sticky。

For the market, the new questions now are:Is this a real turning point? Does it reflect a material slowdown in inflation? How will the Federal Reserve respond?

Former New York Federal Reserve President Bill Dudley said,The report raises the question of whether July will be the last rate hikeHe said he would like to see job growth slow and wages moderate. If the labor market is too tight, inflation will not fall back to 2%.

It is worth noting that Federal Reserve policymakers in the 1970s cut interest rates just as inflation was easing, and were later accused of policy mistakes.

After the data was released, Richmond Fed President Barkin continued to "eagle", arguing that,Inflation remains too high, and the labor market remains so strong that there are still doubts about whether inflation can be stabilized.Barkin says:

"If future data do not confirm that inflation will return to target, I will be willing to take more policy measures, and a premature exit [from tightening] will require more action from the Fed."

In addition, setting aside the July meeting of the Federal Reserve for now,The data will add significance to Federal Reserve Chairperson Jerome Powell's remarks at the annual central banking extravaganza, the Jackson Hole Central Bank ConferenceIt will set the tone for the Fed's policy debate for the rest of the year.