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CPI, BoE, & ECB Jump Into Action - Happy New Year!
Welcome to Thursday’s trade! It was a big day on the markets, headlined by this morning’s US Consumer Price Index (CPI) report. The number came in better than expected, sparking optimism across the economic community. If you missed our live coverage of the CPI release, you can check out CPI Live on this link: https://youtu.be/z6rq6SOCPNU
At press time, stocks are slightly higher, commodities are mixed, and the USD is near flat. It appears that the holiday trading season is already among us. Volumes are lighter than usual, participation is moderate, and trends are sparse. About the only big move is the 5% trend-day-down in natural gas; be ready for these conditions to persist until the end of the year.
US CPI came in at 2.7%, well below expectations (3.1%) and the previous release (3.0%). This was a staggering downside beat, and the largest pullback in inflation since 2021. While inflation remains high, this type of CPI number points toward 2026 being “the year of the rate cut.”
In other news, the Bank of England (BoE) elected to slash interest rates from 4.0% to 3.75% in a tight 5-4 vote. A few hours later, the European Central Bank (ECB) elected to hold the Deposit Facility Rate, the Marginal Lending Facility, and the Prime Rate at current levels.
What a huge news day, the final such day in 2025. Be sure to tune in to our next live stream at 1:00 PM EST on 2 January, 2026. Until then, have a fantastic holiday season, and we look forward to seeing you next year!
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