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Wall Street: Expected High CPI Not Expected to Impact US Stocks
Summary: According to Jinshi's report, Wall Street's trading departments expect that the US Consumer Price Index (CPI) to be released this Thursday will show inflation data on the high side. However, as employment data has become the core narrative of the market, they do not anticipate significant stock market volatility. Stuart Kaiser, head of equity trading ...
According to Jinshi's report, Wall Street's trading departments expect that the US Consumer Price Index (CPI) to be released this Thursday will show inflation data on the high side. However, as employment data has become the core narrative of the market, they do not anticipate significant stock market volatility. Stuart Kaiser, head of equity trading strategy at Citigroup, stated that options traders are betting on the S&P 500 index to fluctuate around 0.7% in both directions after the CPI release, lower than the actual average fluctuation of 0.9% on CPI release days over the past year, and lower than the market's expectations for volatility in the next employment report on October 3. Kaiser even believes that this implied volatility is still on the high side. All of this is related to how traders infer the Fed's interest rate path. US employment data has shown signs of weakness threatening economic growth, so the market expects the Fed to cut the federal funds rate by 25 basis points at the end of the September 17 meeting, and may continue to cut rates at the October and December meetings.
