The massive sell-off in US equities and risk assets in general appears to have quelled the optimism that was priced in, reflecting a view that inflation was going to decline in August. Get your market update from RichardSnowFX here:
US Inflation Data Sends Risk Assets Tumbling
It is surprising just how sensitive markets have become to high importance data prints, with none seemingly more important than data right now. Of course, it is expected that high importance data is likely to cause a fair amount of volatility in the moments leading up to and after the release of said data.
The massive sell-off in US equities and risk assets in general appears to have quelled the optimism that was priced in, reflecting a view that inflation was going to decline in August. That is a typical market response to a miss in important data when participants were clearly on the wrong side of the actual print.
The Fed has been clear that prints of cooler inflation are not enough to warrant a change in course and that “compelling evidence” of declining inflation is what the committee is interested in before even consider a slow-down in the current hiking cycle.The S&P 500 E-mini futures sold off a massive 5.5% yesterday alone, with
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