Markets on tipping point as inflation data in final countdown!

If Jay Powell’s 8-minute speech at #jacksonhole Symposium was a plot twist that caught traders off guard, then tonight’s #inflation data (22:30 AEST) from the world’s largest economy shouldn’t bring any more nasty surprises……or should it?

Since then, US benchmark indices slid into weekly losing streaks and each lost between 7~11%. The technical side was also full of information to digest: the #Dow (US30) failed to ride on 5 upward trendlines and continued to smash through the floor, a good sign that bulls were flanked and kicked in the face as selloffs escalated.

Riding on this tsunami of optimism (artificially created by the Fed?) the #USD became the undoubtful winner as DXY (USD index) broke above 110 for the first time since 2002 while the #EUR plunged below parity (1:1) and the #JPY retreated to 24-year low (144.970).

#Preciousmetals and #Crudeoil were also among the casualties.

We are not facing just one, but two questions now:

1, Will tonight’s #CPI continue to cool from July’s 8.5% (current forecast 8.1% for August)

2, How will market interpret this data? Will the potentially cooler inflation be considered further improvements to the economy, or as the #FederalReserve Chair indicated, still a long way before reaching the target of 2% (6.5% away as of now) and thus no reason to step back from more jumbo #ratehikes?

Either way, volatility and volumes are expected to skyrocket between tonight and next week’s #FOMC interest rate decision.

I’m going to hop on my hammock and swing for now.