Market Analysis: Wall Street Optimistic ahead of Inflation News
The price of the E-mini S&P 500 is at its highs since the beginning of the year, showing the optimism of market participants ahead of the publication of the US consumer price index (CPI) on Tuesday, 15:30 GMT + 3, and producer price index (PPI) data, which will be published in Wednesday, 15:30 GMT+3.
The rise of the E-mini S&P 500 today to some extent reflects expectations that indicators will show a slowdown in inflation:
→ CPI: previous month = 4.9%, forecast = 4.1%;
→ PPI: previous month = 0.2%, forecast = -0.1%;
Reuters writes that there are high expectations in the stock markets that the monetary policy cycle may approach its peak. Today, the likelihood that the Federal Reserve Monetary Policy Committee (FOMC) will keep rates at a meeting this week is estimated at 72%.
On a wave of optimism, the E-mini S&P 500 may reach the upper limit (1) of the rising channel, which runs around the round level of 4,400. However, important inflation data with the subsequent Fed decision may sharply cool market sentiment — be prepared for bursts of volatility.