Market Participants Remain Cautious
Market participants remain cautious as the new week begins. The upcoming US inflation data on Thursday will be closely monitored, even though it falls within the FOMC blackout period. We’re seeing a slightly positive start to the week, with European and US futures ticking up after some late-session buying saved Wall Street from a worse finish last Friday. This suggests a cautious mood as we digest the fallout from the latest US jobs report. The market is clearly on its toes heading into a new week of trading. The US jobs report on September 5th showed 210,000 jobs added, beating expectations, with wage growth steady at 4.2% year-over-year. This economic strength initially cheered investors but later raised fears that the Federal Reserve may keep its policies strict. This was seen in the bond market, with the 10-year Treasury yield briefly reaching 4.35% before settling back down. All attention now shifts to the US inflation data scheduled for this Thursday, which is the last crucial report before the FOMC meeting blackout period ends. Analysts expect the upcoming Consumer Price Index (CPI) to be 3.4%, up slightly from last month’s 3.3%. A higher number could lead to significant market turbulence.Attention Shifts to US Inflation Data
This data is critical because fed funds futures indicate a roughly 45% chance of another rate hike at the September 17th FOMC meeting. A high inflation report could push those odds above 50%, forcing a significant reassessment in risk assets. We are prepared for an increase in market volatility around this release. Given this upcoming risk, we expect to see the VIX index, which closed last week near 14, climb higher in the coming days. Derivative traders should consider strategies that benefit from this potential rise in market volatility, such as buying straddles on major indices. These positions can profit from large price swings in either direction following the inflation report. In Europe, the gains in the Eurostoxx are also supported by the European Central Bank’s decision last week to hold rates steady. However, with service sector inflation still running high across the continent, any signs of persistent US inflation could dampen sentiment here as well. We are monitoring currency derivatives, as a strong Fed surprise could strengthen the dollar and impact European exporters.
เริ่มซื้อขายทันที – คลิกที่นี่ เพื่อสร้างบัญชีจริงของ VT Markets
