Mixed US inflation data probed bears but the show is on, gold, BTC steadies

Market’s pessimism waned after the US Consumer Price Index (CPI) data on Tuesday but the optimism couldn’t be restored during early Wednesday as Fedspeak, geopolitical and China’s virus woes keep stopping the bulls.

That said, Wall Street buyers initially cheered softer-than-expected Core CPI before the hawkish comments from Fed policymakers exerted downside pressure, allowing the floors to close with mild losses.

Stocks in Asia-Pacific remained mixed with Japan, New Zealand and Australia printing gains but bourses in China, Hong Kong and India remained in the red. Further, equities in Europe and the UK also print mild losses during the initial hour of trading.

The US dollar retreated from a two-year high before regaining power. However, prices of gold remain positive due to its traditional safe-haven status. On the other hand, crude oil consolidates the biggest daily jump in three weeks.

Cryptocurrencies fade rebound from a three-week low marked earlier in the week as traders lose interest amid multiple negatives for the once-loved markets.

Following is the list of major assets’ latest performances:

• BRENT OIL pares recent gains around $105.00, down 0.30% intraday.
• GOLD remains indecisive around $1,965 as the USD Index renews multi-day high above the 100 rate.
• Dow Jones, NASDAQ, and S&P 500 all lost around 0.30% on Tuesday.
• DAX loses near 0.50% and FTSE 100 gains 0.50% as it approaches 7,600 level.
• BTCUSD struggles to defend the $40,000 threshold but ETHUSD gains 1.0% to 3,060.

Bears are not out of the woods…

Although a slight reduction in the US Core CPI could pull back the USD and Treasury yields, comments favoring faster rate hikes and balance sheet normalization by the Fed policymakers pushed back the optimism the previous day. The risk-off mood also gained clues from Ukraine as the West braces for more sanctions and arms help to Kyiv. 

Adding to the market’s pressure in Asia were surging covid counts in China and the RBNZ rate hike. However, the BOJ’s readiness to keep the easy money flowing joined Russia’s offer to provide their crude oil to ‘friendly’ nations in any price range eased fears a bit, not much help though.

Talking about cryptocurrencies, BTCUSD struggles to remain above $40,000 as CoinShares updates about the biggest weekly outflow from cryptocurrencies in 13. Further, Mozilla dumps Bitcoin as a donation while preferring Proof-of-Stake (PoS) cryptos citing environmental issues. Even so, ETHUSD stays mildly bid as Bank of America (BofA) expects BTC and other major cryptocurrencies to outperform bonds and stocks amid recession fears.

⏫ 🟢 Strong buy: USDJPY

⏬ 🔴 Strong sell: ETH/USD

⬆️ 🟢 Buy: USD Index, gold, silver

⬇️ 🔴 Sell: Brent oil, DOW JONES, S&P 500, BTC/USD, DAX, FTSE 100

Pre-ECB, BOC anxiety could join broad risk-off mood

Having witnessed a mixed reaction to the US CPI data, global markets may remain on the back foot amid prevailing geopolitical concerns emanating from Ukraine. Adding to the fears are expectations of faster Fed tightening and China’s COVID-19 woes.

For the day, the Bank of Canada’s (BOC) monetary policy meeting can entertain traders, together with the US Producer Price Index (PPI) data. However, major attention will be given to Thursday’s European Central Bank (ECB) meeting and Fedspeak for clear direction.

It’s worth noting that cryptocurrency bulls might have further hardships to face as traders lose faith in the e-currencies amid firmer USD and the crypto market’s separate fundamentals.

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