Inflation continues to show signs of bouncing in the US
This Daily Digest will cover:
- 🇺🇸 Inflation continues to show signs of bouncing in the US
- 🇪🇺 Brexit fudge number 47 likely
- 💵 USD strong and equities muted
- 🪙 Crypto quiet in mid range
Friday saw the release of core PCE inflation data that beat all expectations to the upside, joining all other inflation readings of late in the U.S.
The USD accelerated higher and equities sagged as you would expect but there has been little follow through in Asia and a bounce in early European trade. Dare I say it, the move is starting to look a little tired to me and we might need to be more selective with the trend from here on.
Seasonally, March is a tricky month to trade as fresh money tends to be put to work in April at the start of the new financial year, but with the market underinvested a drift sideways to lower may play out rather than a continuation of the liquidation. The market is repricing its FED pivot stance but from conversations it is clear they still want to play the “when rather than if” trade overall so rallies will be frequent and sharp.
Brexit rears its ugly head yet again with it seeming likely that an announcement of another fudge around the NI protocol will happen later today. Sterling is off its lows on the news but faces a barrage of resistance levels starting at 1.1990 and with month end signals negative for the pair, I suspect the rally will fizzle out sooner rather than later.
Crypto is broadly a touch lower this morning after a refreshingly quiet weekend. ETH continues to be the outperforming major as BTC licks its wounds post the attempted vault of 25,000. With my above macro view it is hard to get excited at these mid range levels and tactical trading of the range remains the play, tedious for now but sometimes sensible is way forwards!
As always, good luck out there.
