Markets React to Hotter-Than-Expected CPI; Veterans Day May Mean Slightly Lighter Trade
Before diving into the markets, all of us at Cannon Trading would like to extend our sincere gratitude to the men and women who have served our country. On this Veterans Day, we thank all veterans for their sacrifice, dedication, and service.
Traders should be aware that banks are closed in observance of Veterans Day. While futures markets remain open and active, holiday conditions could lead to slightly lighter participation. That said, we do not expect a significant reduction in activity, especially considering the elevated volatility seen across multiple asset classes following today’s hotter-than-expected CPI report.
Inflation data came in above market expectations, leading to a broad repricing across stocks, bonds, metals, currencies, and energy markets. Treasury prices moved lower as yields climbed, while equity index futures came under pressure as traders reassessed the likelihood of future Federal Reserve rate cuts.
As of this afternoon:
- E-mini S&P 500 futures were down 0.42%
- E-mini Nasdaq futures fell 0.79%
- 30-Year Treasury Bond futures dropped 1.01%
- Gold declined 2.67%
- Silver lost 3.68%
- Copper fell 1.80%
- Bitcoin traded lower by 1.46%
Meanwhile, several agricultural markets bucked the trend, with Soybeans gaining 3.35%, Corn up 2.11%, and Wheat advancing 0.68%.
From a trend perspective, many major markets remain in established short-term downtrends, while longer-term trends continue to show a mixed picture. Treasury markets, precious metals, and several currency markets remain under pressure, while select commodity sectors continue to display relative strength.
On Wednesday’s economic calendar, traders will be focused primarily on developments from Europe, including:
- German Final CPI m/m
- Remarks from Bundesbank President Nagel
- Italian Industrial Production m/m
- ECB President Lagarde speaking
- German 30-Year Bond Auction
While the U.S. calendar is relatively light due to the Veterans Day holiday, today’s inflation surprise has ensured that market participants remain highly engaged. Expect continued sensitivity to interest rate expectations, bond market movements, and any central bank commentary.
With volatility returning across multiple sectors, disciplined risk management remains critical as markets digest the latest inflation data and recalibrate expectations for monetary policy heading into year-end.
Happy Veterans Day and thank you again to all who have served.
Trade Smart. Trade Confidently. Trade Cannon.
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