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Important US inflation data Tuesday🚨

Posted: 14th March 2023

Good morning and welcome to episode 804 of ‘Talking Bull’. Here are the latest headlines today, Financial sector continues to dominate, Further shift in Fed expectations, ECB expectations also dip, US inflation expectations decline, US yields slide, Dollar loses further ground, UK wages moderate slightly & Important US inflation data Tuesday.


We take a technical look at key markets that are likely to be impacted by today’s events. Also, we participate in a ‘Gun to the head’ challenge where each of us calls a live trade. These will expire at 9pm tonight and we will keep track of the progress over time.

We hope you enjoy it!

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Show notes:

Joe was stopped out on GBPAUD. Steve hit target on Gold for a 3.10R win!

We have included an illustration based on a £1000 account. This will follow the combined return of our morning trades by risking 1% of the trading capital per trade. The 1% risk is a variable monetary amount and will rise and fall based on the success of the calls.

We are currently up 200.90% collectively since we began recording Talking Bull on the 30th October 2019.


Financial sector continues to dominate

The US move to protect all deposits at Silicon Valley Bank (SVB) and potential risk of contagion in the financial sector continued to dominate during Monday.

Conditions were slightly calmer on Tuesday, although there were still notable nervousness.

Further shift in Fed expectations

Unease over the US financial sector triggered a further shift in expectations surrounding Federal Reserve policy.

For the March policy meeting, markets moved to price out completely the possibility of a 50 basis point hike.

Indeed, markets signalled close to a 30% chance that there would be no increase in rates from 4.75% and at least one bank forecast that there would be a rate cut.

ECB expectations also dip

There was also a shift in ECB expectations with markets now considering that the most likely outcome is that there will be a 25 basis-point rate hike compared with 100% expectations of a 50 basis-point hike last week.

US inflation expectations decline

The New York Federal Reserve 1-year inflation expectations index dipped to 4.2% from 5.5% previously and the lowest reading since May 2021.

The 5-year index increased marginally to 2.6% from 2.5%. Over the weekend, the US Treasury and Federal Reserve announced that all deposits in SVB would be protected. The move triggered a strong rebound in risk appetite with a recovery in equities.

US yields slide

The US 2-year yield slumped on Monday and hit 4.00% for the first time in close to 6 months and compared with 5.00% last week.

The 2-year yield traded just below 4.00% on Tuesday.

Dollar loses further ground

The slide in bond yields, unwinding of yield-curve inversion shift in Fed expectations and a rebound in risk appetite triggered sharp dollar losses.

The dollar index overall dipped to 3-week lows on Monday before a tentative recovery on Tuesday.

UK wages moderate slightly

The UK labour-market data recorded an unchanged unemployment rate of 3.7%. The headline increase in average earnings slowed to 5.7% from 6.0% with underlying increase at 6.5% from 6.7%.

Important US inflation data Tuesday

The US consumer prices data will be released on Tuesday. Consensus forecasts are for  a 0.4% increase in prices for the month with the year-on-year inflation rate declining to 6.0% from 6.4%.

The core annual rate is forecast to edge lower to 5.5% from 5.6%.

The Fed will find it easier to justify backing away from a March rate hike if the data is in line or weaker than expected while strong data would cause major tensions. Given the financial-sector focus, the impact may be less than expected otherwise.

Data Today

12.30: US consumer prices

Key events over the next week

March 15th: UK budget statement

March 16th: ECB policy decision

Gun to head challenge – Update

Today’s trade idea








Have a great week everyone.

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