Daily digest market movers: Gold trims gains amid high US yields
- The US Consumer Price Index (CPI) for March is expected to rise 0.3% MoM, below February’s 0.4%, but higher than the 0.17% pace needed to curb inflation to the 2% goal. On an annual basis, the CPI is expected to rise from 3.2% to 3.4%.
- Underlying inflation, also known as core CPI, is expected to dip from 0.4% to 0.3% MoM and from 3.8% to 3.7% YoY.
- Strong price pressure may dampen expectations for rate cuts in June, whereas softer inflation figures could fuel speculation for rate reductions.
- Last week’s stronger-than-expected jobs report kept interest rate investors skeptical of a Fed rate cut in June’s meeting, with odds tumbling from around 70%.
- The CME FedWatch Tool depicts traders remaining slightly more optimistic than Monday, with odds for a 25-basis-point rate cut in June up from 52% to 57.8%.
- World Gold Consortium reveals that the People’s Bank of China was the largest buyer of the yellow metal, increasing its reserves by 12 tonnes to 2,257 tonnes.
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