Good morning everyone, and welcome back after the extended weekend. Hopefully you had some time to relax with family and friends.
Markets are opening with continued focus on the Middle East. Crude oil prices remain elevated as tensions are still ongoing, with concerns about a possible longer closure of the Strait of Hormuz. At the same time, there are also headlines about a potential ceasefire, so we could see volatile moves again this week. Any meaningful sell-off in oil would likely be supportive for other markets.
But when looking at the Dollar Index, price is still moving sideways, and it looks like we are forming a triangle. This suggests that there could still be a preference for cash in the near term, especially with important data this week, including US and also China inflation figures this week. We know that any hotter-than-expected inflation data could push central banks toward tighter policy, which would likely support higher yields and a stronger dollar. And looking at Dollar; is not done yet I think- I see a triangle, so run to cash still the best scenario, especially with 3.4% expected yearly inflation in the US, up from 2.4%.
Its not a question of whether inflation is coming up with how much! So CB cuts are done, and the market is pricing that in.
I will talk about this and lot more in our webinar today at 15CET.
Grega
Become a premium member
Get daily Elliott Wave updates for US Single Stocks, SP500,DAX, GOLD, SILVER, CRUDE, FX, CRYPTO, etc. or apply for unlimited access to the Elliot Wave educational videos.