Oil above 80 USD ahead of US CPI report
12 January 2022
The WTI oil went vertical since its December lows, pushing to two-month highs today and rising above the 80 USD threshold again as inflation continues to run wild globally.
Traders expect today's US CPI December data to show another increase year-on-year to 7.0%, the highest level in many decades, up from 6.8% in November. In addition, the core CPI indicator is seen rising to 5.4% yearly, much higher than 4.9% previously.
At the same time, US yields continue to rise, with the 10-year yield stalling near 1.8% and the 2-year yield advancing above 0.9%. The real yields have also moved higher recently.
Yesterday, at his confirmation hearing for a second term in charge of the US central bank, Powell stated that the economy could handle tighter monetary policy despite the new Covid-19 surge.
US equities rose sharply yesterday, erasing some of the recent losses as Monday's bullish reversal bars were confirmed. EU bourses followed higher, pushing the DAX index above 16,000 EUR again.
The dollar continues to decline in the FX market, with the EURUSD pair slowly moving toward the 1.14 zone, boosting precious metals. As a result, both gold and silver rallied notably Tuesday.