The U.S. Bureau of Labor Statistics will announce the consumer price index (CPI) data for January today. The inflation rate in the U.S. is expected at 6.2% in January, the lowest since October last year. The inflation fell significantly in December, dropping from 7.1% to 6.5%.
Meanwhile, core inflation, which excludes volatile food and energy, is expected to ease to 5.4% from 5.7%. This CPI release is key data that will determine whether the U.S. Federal Reserve opts for further monetary policy tightening. The U.S. Fed slowed the rate hike to 25 bps this month due to cooling inflation.
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The U.S. stock indexes tied to futures Dow Jones, S&P 500, and Nasdaq are currently trading flat and green, after recording over a 1% jump on Monday.
Wall Street expects a further fall in the U.S. CPI data for January as oil and food prices continue to fall. JPMorgan estimated a 70% chance of CPI coming in at 6.3%. The bank’s trading desk predicted a fall below 6.3% will push the market up by 2.5-3%.
Bank of America, Scotiabank, and Barclays expect a fall in CPI to 6.1%. Whereas, Credit Suisse, JPMorgan, TD Securities, and Wells Fargo predict CPI to come in at 6.2%, the same as per the consensus.
However, Visa, Goldman Sachs, and Morgan Stanley are expecting CPI to come in at 6.4% for January. The fall in inflation will be a huge boost for the markets as sentiment is already positive in the year.
How Crypto Market Will React?
The crypto market is facing renewed struggles due to the U.S. regulators’ action against crypto firms, staking, and stablecoins. Traders await U.S. CPI data to make their next move and hope to continue the recovery seen in January.
Bitcoin price is currently trading at $21,849, up 2% in the last 24 hours. The market sentiment is on the positive side as investors expect cooling inflation in the coming months.
The US Dollar Index (DXY) fell below 103 today after rising continuously for the last week. The crypto market moves in the opposite direction to DXY. Therefore, a decline in DXY will be a key factor to watch amid the volatile market conditions.
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