General Market Analysis – 13/03/25

US Stocks Rise After Weaker CPI Data – Nasdaq Up 1.2%

US stocks rose in trading yesterday after a lower inflation print increased hopes of Federal Reserve rate cuts. The headline CPI figure came in 0.1% lower than expected, confirming a cooling US economy, and investors pushed back into tech stocks. The Dow closed down 0.2%, but the tech-heavy S&P and Nasdaq recorded strong gains on the day, rising 0.49% and 1.22% respectively.

Treasury yields and the dollar both finished higher despite the data release, with the 2-year yield up 4.3 basis points to 3.986% and the 10-year yield up 3.2 basis points to 4.312%. The DXY rose 0.15% to 103.58.

Oil prices also surged following lower-than-expected US oil inventories, with Brent crude up 2.04% to $70.98 per barrel and WTI rising 2.16% to $67.68 per barrel. Meanwhile, gold continued its climb towards record levels, increasing 0.65% to $2,937.56.

Dollar Remains Under Pressure

The US dollar index snapped a seven-day losing streak yesterday but remains under pressure, as ongoing market uncertainty over tariffs and global trade tensions weighs on investor sentiment. The index has now retraced the gains made after the November election of President Trump and the Republican Party, which had initially sparked inflation concerns, falling more than 6% from its January highs.

Some traders believe the market may now undergo a reset following this sharp decline, particularly if geopolitical uncertainty eases. While US economic data has weakened over the past few months, many feel this has already been priced into the dollar. With several major currency pairs approaching key technical levels on longer-term charts, the greenback’s fortunes could shift in the coming sessions.

More US Inflation Data in Focus

This week has been relatively quiet in terms of macroeconomic data releases and central bank updates, and today is no exception. There is little of note on the calendar during the Asian and European trading sessions, but key US inflation data is due shortly after the New York open.

Producer Price Index (PPI) data is scheduled for release, and while its impact is typically lower than last night’s CPI figure, significant market moves could follow if the data deviates from the expected 0.3% month-on-month increase for both the headline and core figures. At the same time, weekly unemployment claims data will be released, with expectations for a 226,000 print—an increase of just 5,000 from last week’s figure.

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