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  • US consumer price report Wednesday expected to show inflation isn’t going away

    From cnbc.com

    The January consumer price index report is likely to tell a familiar story: Another month, another expected miss for inflation as it relates to the Federal Reserve’s goal, with concerns aplenty about what happens from here. So instead of looking for hope from the headline readings, which aren’t expected to change much from December, markets will pore through the details for trends that could shed some hope that the Fed eventually will be able to start lowering rates again. “Inflation is stuck above target, with risks skewed to the upside, activity is strong, and the labor market appears to have stabilized ... (full story)

  • #1
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  • Feb 11, 2025 8:14pm Feb 11, 2025 8:14pm
1. Gold (XAU/USD)

Why: Gold remains supported by geopolitical risks, including the threat of a trade war and central bank buying. With inflation data due soon, it could drive additional volatility in gold prices.
Strategy: If you're expecting further geopolitical tensions or inflation data to fuel demand for gold, buying XAU/USD on dips might be a good strategy. However, if inflation data surprises with a strong number, gold could face downward pressure, so you could also consider selling XAU/USD if you're bearish on gold in the short term.

2. EUR/USD

Why: The EUR/USD pair is highly sensitive to U.S. inflation data, as it will influence expectations of future Fed actions. The euro could also be impacted by ongoing ECB policy, while the U.S. dollar reacts strongly to inflation data.
Strategy: If you expect inflation to be weak and the Fed to stay dovish, buy EUR/USD. If inflation data shows signs of higher inflation and potential Fed tightening, consider selling EUR/USD.

3. USD/JPY

Why: The USD/JPY pair is sensitive to U.S. economic data (especially inflation) and risk sentiment. If the U.S. sees higher inflation, it may strengthen the dollar against the Japanese yen. If there is an increase in risk aversion (due to trade war fears), the yen may benefit as a safe haven.
Strategy: If you anticipate stronger inflation data pushing the Fed toward tightening, buy USD/JPY. If you expect weaker inflation or an increase in geopolitical risk, consider buying JPY (as a safe haven) and selling USD/JPY.

4. GBP/USD

Why: The Bank of England’s recent dovish rate cuts have weighed on the British pound. If U.S. inflation data surprises to the upside, it could push the pound lower against the dollar.
Strategy: Given the dovish BoE stance and potential strength in the U.S. dollar, selling GBP/USD could be a favorable trade, especially if U.S. inflation exceeds expectations.

5. USD/CNY (Chinese Yuan)

Why: If the geopolitical tensions (tariffs) escalate, gold's safe-haven appeal could strengthen the Chinese yuan as well, especially with the PBoC’s gold buying increasing. This pair might benefit from a shift in sentiment towards emerging market currencies.
Strategy: If the trade war fears continue and central bank demand for gold supports the yuan, you might consider selling USD/CNY (expecting the yuan to strengthen).

My Suggestion:

Short-Term (Day Trades): Focus on EUR/USD and GBP/USD, where short-term moves can be more predictable based on inflation data and Fed expectations.
Medium-Term (Position Trades): Gold (XAU/USD) offers a strong opportunity, especially with ongoing geopolitical risks and central bank behavior supporting demand for gold.
Safe-Haven Plays: USD/JPY could be a good option if you expect a risk-off environment where traders flock to the Japanese yen for safety.
  • #2
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  • Feb 11, 2025 9:27pm Feb 11, 2025 9:27pm
so which position should i enter?
  • #3
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  • Feb 12, 2025 5:35am Feb 12, 2025 5:35am
  •  Trader#6527
  • | Status: Unregistered Trader
Wait for the CPI results.
  • #4
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  • Feb 12, 2025 6:54am Feb 12, 2025 6:54am
What are the insights?
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  •  Trader#7F54
  • | Status: Unregistered Trader
Create Account
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    Williams: From Where We Are Now

    From newyorkfed.org|Feb 11, 2025|1 comment

    It’s great to be back at Pace University—particularly here at 15 Beekman. I’ve watched this building rise from the ground, and it’s been wonderful to see it develop as a new focal point for the school. The New York Fed has a number of connections to Pace. We’re close neighbors and anchor institutions here in Lower Manhattan. More than 100 of our employees are proud Pace alumni. And through the years, Pace students have represented the Second District well in the College Fed Challenge competitions. I’m sure the members of the Economics Society who are here today have come armed with thought-provoking questions about the economy and monetary policy. And I look forward to answering them. But first, I’m going to take this opportunity to talk about where the economy’s been, where it is today, and where it’s going. I’ll discuss how the Fed is working to achieve its dual mandate of maximum employment and price stability. And I’ll give my economic outlook. Before I go further, I must give the standard Fed disclaimer that the views I express today are mine alone and do not necessarily reflect those of the Federal Open Market Committee (FOMC) or others in the Federal Reserve System. Where We’ve Been Now that most economic data for 2024 have come in, it’s a post: FED’S WILLIAMS: THE FED HAS MADE SIGNIFICANT PROGRESS LOWERING INFLATION. post: FED’S WILLIAMS: MONETARY POLICY WELL POSITIONED TO ACHIEVE THE FED GOALS. post: FED’S WILLIAMS: INFLATION EXPECTATIONS ARE WELL ANCHORED.

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