Consumer inflation in April in the US came in below market expectations on a monthly basis, while on an annual basis, it matched market expectations. Following the US CPI data, expectations for interest rate cuts in 2024 increased in Fed swaps.
According to data from the US Department of Labor, consumer prices rose by 3.4 percent in April compared to the same month last year. Market expectation was also that the inflation rate, which was 3.5 percent in the previous month, would decrease to 3.4 percent.
On a monthly basis, consumer prices were reported at 0.3 percent, below expectations. Markets had expected an increase of 0.4 percent, the same level as the previous month.
Core inflation, which excludes food and energy, came in at 0.3 percent monthly and 3.6 percent annually. Analysts had also expressed the view that core inflation would show a monthly increase of 0.3 percent and an annual increase of 3.6 percent.
Energy prices in the country rose by 1.1 percent monthly and 2.6 percent annually, while food prices remained unchanged monthly and rose by 2.2 percent annually.
Real average weekly earnings showed a 0.4 percent decrease in the same month.
How did the markets react?
– Following the US CPI data, the price of gold rose to $2379. As of 15:46, the yellow metal traded at $232, up 0.61 percent.
– US 2 and 10-year Treasury yields accelerated their decline and fell by more than 10 basis points.
– After the data, the dollar weakened against the Euro, and the Euro/dollar pair reached 1.08694.
– The Japanese Yen gained over 1 percent against the dollar.
– Bitcoin surpassed $64,000 with a 4 percent increase.
