Tonight's CPI data is a critical juncture, especially against the backdrop of a highly sensitive market sentiment, and its impact cannot be overlooked.
If the CPI is below expectations, it suggests a moderation in inflationary pressures, and the market is likely to interpret this as a signal for the Federal Reserve to accelerate interest rate cuts. At that time, U.S. stocks and crypto assets may experience a short-term rally, and market sentiment will quickly improve.
If the CPI is above expectations, the market may worry about a delay in the interest rate cut process, leading to a potential quick downturn in the short term, and bears will seize this opportunity to release energy.
If the CPI meets expectations, the market response may be relatively muted, and funds' focus will shift to the next catalytic event, such as the Federal Reserve meeting, PPI data, etc.
Regardless of what the final data shows, volatility is almost inevitable, but the direction may not be clear at first.
Especially in the few minutes after the data is released, it is easy to see false breakouts and false pullbacks, creating a "double whammy" situation.
For short-term trading, it is essential to strictly control positions at this time to avoid being eliminated by the market during extreme phases of emotional volatility.
