Gold weekly… the pullback continues to support. Will it hold? Will it break? Will it bounce? We’ll find out soon as we head into the June FOMC and new Fed chair.
Bitcoin weekly… has taken an absolute ass whipping over the last several quarters. But it’s now testing longterm major support. Will we see the dead cat bounce next🤔
SPX weekly… yellow caution on the weekly currently. Next levels of support marked on the chart. Inflation data incoming Wednesday & Thursday. Consumer sentiment on tap Friday. World Cup and SpaceX IPO dead ahead too.
Conversely, a softer CPI reading could ease fears that inflation is becoming entrenched and provide some relief to risk assets. Either way, the May CPI may prove to be one of the most important releases of the year and could even be a critical inflection point for the markets.
Markets are currently beginning to price in higher rates. A hotter-than-expected CPI report would likely reinforce that view and could force markets to further reprice the expected path of monetary policy.
The strong jobs report, coupled with a third consecutive month of elevated inflation and an accelerating trend, will make it difficult for the market and the Fed to ignore whether the rise in oil proves temporary or not.
If the May CPI reading comes in as expected, the Fed will face a three-month annualized rate of change of about 8.3% and a six-month rate of change of 5.4%.
Friday’s jobs report increased the odds of a rate hike at the December 2026 meeting to 65%, with the market pricing in a Fed Funds rate of 3.86%. As a result, the two-year rate closed at 4.15%, its highest level since February 2025.
The May CPI report will be released on June 10 and just got a whole lot more important. The May jobs report triggered a sharp sell-off in the market on June 5 as a hotter-than-expected report raised expectations for a Fed rate hike.
Key Events This Week:
1. May Existing Home Sales data - Tuesday
2. May CPI Inflation data - Wednesday
3. May PPI Inflation data - Thursday
4. OPEC Monthly Report - Thursday
5. MI Inflation Expectations data - Friday
6. MI Consumer Sentiment data - Friday
All eyes are on inflation this week.