NASDAQ 100, GOLD PRICE FORECAST:
- Gold and the Nasdaq 100 current an unattractive risk-reward profile at this exact second following latest U.S. financial knowledge
- With U.S. inflation working above the two.0% goal and the labor market showcasing distinctive resilience, Fed rhetoric may begin shifting in a extra hawkish route within the close to time period
- Fedspeak will probably be key within the close to time period
Most Learn: US Greenback Bid as Sticky CPI Poses Dilemma for Fed, Setups on EUR/USD, GBP/USD
Gold costs and the Nasdaq 100 may very well be in danger of a bigger downward correction following the newest set of client value and unemployment claims figures launched on Thursday. Which means new all-time highs for the dear steel and the know-how index might have to attend a bit longer.
On the inflation entrance, the December CPI report shocked to the upside, with the all-items index accelerating to three.4% from 3.1% prior. When it comes to labor market knowledge, final week’s functions for jobless advantages sank to the bottom degree in three months, indicating that layoffs stay very restricted within the economic system.
US ECONOMIC DATA
Supply: DailyFX Financial Calendar
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With client costs comfortably above the Fed’s 2.0% goal and the job market showcasing distinctive resilience, the U.S. central financial institution will probably be reluctant to chop rates of interest sharply in 2024. This might shock markets given present expectations for about 135 foundation factors of easing for the yr.
Whereas Treasury yields moved decrease on the day, opposite to instinct, the pullback will not be associated to Thursday’s knowledge, however maybe to safe-haven demand following reviews that the U.S. and its allies might conduct airstrikes in opposition to Houthi rebels in Yemen.
Geopolitical dangers are at all times a wild card, however this case ought to be contained, which means no escalation right into a broader regional battle within the Center East. On that observe, yields are prone to resume their advance as soon as the mud settles, however to get a greater sense of their trajectory, merchants ought to carefully comply with Fedspeak.
The next chart exhibits latest inflation developments for each the headline and core indicator.
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Supply: BLS
In mild of latest occasions, merchants shouldn’t be shocked if Fed rhetoric begins to shift in a extra hawkish route, with policymakers pushing again in opposition to a charge lower in March arguing that extra proof on disinflation is required to tug the set off. This may very well be fairly bearish for valuable metals and tech shares.
For the explanations outlined earlier than, the risk-reward profile for each gold and the Nasdaq 100 doesn’t look engaging at this exact second. Whereas the outlook may change with the introduction of latest info, merchants ought to train warning for now, avoiding blindly chasing suspicious rallies.
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