Daily digest market movers: DXY shrugs off weak sentiment data on the back of hawkish bets
- Early April saw a decrease in US Consumer Confidence as indicated by the University of Michigan's Consumer Sentiment Index, which fell to 77.9 from March's 79.3, shyer than anticipated.
- Decreases were recorded in Sentiment Indices for both Current Conditions and Consumer Expectations, falling to 79.3 and 77 from 82.5 and 77.4, respectively.
- On Wednesday, the Consumer Price Index (CPI), reported by the US Bureau of Labor Statistics, rose to 3.5% YoY in March, a jump from February's 3.2%. The core CPI also accelerated.
- Because of heightened inflation figures, there is increased anticipation of a hawkish response from the Fed, which has led to a rise in US Treasury bond yields, subsequently strengthening the US Dollar (USD).
- Susan Collins, from the Boston Fed, pointed out that only two rate cuts could happen this year. Austan Goolsbee also warned that the Fed might take action if Personal Consumption Expenditures accelerates.
- The Odds of a July cut are reportedly less than 60%, a decrease from the prior 99% chance before the inflation data were publicized. The odds for a second rate cut happening in December stand at 75%.
- The market's hopes for a June rate cut also declined to around 20%.
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