100s of titles, one news app for just $10 a month.
Dive Deeper:
CPI Inflation Rate Is Finally Falling But Not Enough; Dow Jones Falls
The CPI inflation rate began to pull back from a 40-year high, but it came in hotter than expected. The…
Stock Market Volatile After Hot Inflation Report, As Apple, Techs Lag
The stock market remained volatile after the latest inflation report came in higher than expected, but indexes were mainly higher…
'Inflation's Momentum Is Still Strong': Experts React To 8.3% CPI Inflation, Higher Than Expected
The SPDR S&P 500 ETF Trust SPY (NYSE: SPY) traded lower by 0.6% on Wednesday morning after the Labor Department…
Stock Market Dips On Higher-Than-Expected Inflation; Oil Prices Resume Climb
The stock market fell Wednesday on higher-than-expected inflation as rising oil prices fueled the inflation fire.
One subscription that gives you access to news from hundreds of sites
US inflation peaks but disappoints markets
London (AFP) - US stocks slid Wednesday following data that showed a slowdown in inflation, but less than investors had…
US inflation dips to 8.3% but stays close to 40-year high –as it happened
US food prices rise at fastest rate since 1981, as ECB’s Lagarde cements expectations for July rate hike, and German…
Get all your news in one place
Latest Business news:
The Star executive chairman John O'Neill announces his resignation
The executive chairman of Star Entertainment Group, John O'Neill, has tendered his resignation and will step down from the board.
Read news from The Economist, FT, Bloomberg and more, with one subscription
Learn More
Fashion and beauty innovators see opportunities for disability inclusion to cater for 'trillion-dollar' market
There is a growing movement in the fashion and beauty industry to develop products for and with people with disabilities,…
S&P 500 Headed for Bear Market as Losses Exceed 20% From High
A two-year run in stocks that began at the depths of the coronavirus panic and became one of most powerful…
How America and Europe hope to stop China’s digital juggernaut
Bilateral boldness is essential. Harder still will be the necessary give and take
HSBC pressured to sack banker who discredited climate crisis warnings
Speech by head of responsible investing Stuart Kirk dismissed global heating and joked about flooding risks
From analysis to good news, read the world’s best news in one place
UK Fans Worry American Owners Will Tarnish Their Football
More than half of English Premier League clubs will soon be backed by US money. That has fans worried.
Terra LUNA crash sparks caution in crypto market. What should investors do?
Top of the house cryptos Bitcoin and Ether also faced the brunt of selling pressure in stablecoins.

DXY: US April CPI Keeps Inflation Fears Alive

By Carl Paraskevas

Those who awaited US April CPI data hoping for a summary execution of the inflation narrative walked away from Wednesday’s release disappointed. But the reality is that inflation, although falling, is not doing so quite at the rate most were expecting. For the time being, traders will need to balance both of those factors as they trade the US dollar.    

What Wednesday’s CPI data did show is that inflation can at least fall on an annualised and monthly basis in one form or another. Headline CPI in April dropped to 8.3% from 8.5% even though it was above the 8.1% economists were predicting. Likewise, the core inflation rate, which excludes food and energy prices, fell to 6.2% from 6.5% prior, missing expectations of a 6.0% drop.

That, alongside expectations of further disinflationary pressures, still point to a further drop in CPI as the year progresses. The unexpected degree of acceleration in both m/m figures, however, undermines those expectations. Headline CPI accelerated by 0.6% m/m versus an expected 0.4% (prev. 1.2%), while the core figure rose by 0.6% m/m versus 0.4% (prev 0.3%).

Analysts, moreover, have been quick to point out that several components of CPI still point to underlying inflation worries. For one, services ex-energy component, rather than fall, rose by 0.7% m/m. In addition, rents rose by 0.5% as did owner’s equivalent rents. In fact, rents were one key reason why April’s core CPI rose by more than many were expecting.

Still, high inflation has been the market narrative for some time. The initial move higher in the DXY to today’s inflation data were quick to respond to an above consensus print. Meanwhile, the subsequent retracement in gains means there is some capitulation to the idea that inflation is falling, and Fed rate hiking expectations may be close to their peak. The market is just waiting for the proof in the pudding.

What is inkl?
The world’s most important news, from 100+ trusted global sources, in one place.
Morning Edition
Your daily
news overview

Morning Edition ensures you start your day well informed.

No paywalls, no clickbait, no ads
Enjoy beautiful reading

Content is only half the story. The world's best news experience is free from distraction: ad-free, clickbait-free, and beautifully designed.

Expert Curation
The news you need to know

Stories are ranked by proprietary algorithms based on importance and curated by real news journalists to ensure that you receive the most important stories as they break.

Dive Deeper:
CPI Inflation Rate Is Finally Falling But Not Enough; Dow Jones Falls
The CPI inflation rate began to pull back from a 40-year high, but it came in hotter than expected. The…
Stock Market Volatile After Hot Inflation Report, As Apple, Techs Lag
The stock market remained volatile after the latest inflation report came in higher than expected, but indexes were mainly higher…
'Inflation's Momentum Is Still Strong': Experts React To 8.3% CPI Inflation, Higher Than Expected
The SPDR S&P 500 ETF Trust SPY (NYSE: SPY) traded lower by 0.6% on Wednesday morning after the Labor Department…
Stock Market Dips On Higher-Than-Expected Inflation; Oil Prices Resume Climb
The stock market fell Wednesday on higher-than-expected inflation as rising oil prices fueled the inflation fire.
One subscription that gives you access to news from hundreds of sites
US inflation peaks but disappoints markets
London (AFP) - US stocks slid Wednesday following data that showed a slowdown in inflation, but less than investors had…
US inflation dips to 8.3% but stays close to 40-year high –as it happened
US food prices rise at fastest rate since 1981, as ECB’s Lagarde cements expectations for July rate hike, and German…
Get all your news in one place