Market Spotlight: July FOMC Rates Pricing Increases Following June CPI Beat

July FOMC Pricing Favours 1% HikePricing for the upcoming July FOMC has swung in favour of a fullpercentage point hike following yesterday’s US CPI report. June CPI was seenrising to 9.1% annually, marking the hottest US inflation reading in 40-years. Looking at the monthly data, headline CPI wasseen coming in at 1.3% in June, up from 1% prior and well above the 1.1% themarket was looking for. Additionally, core CPI was seen at 0.7% on the month,up from 0.6% prior and, again, well above the 0.5% the market was looking for.With the latest US inflation data putting rest to any idea ofconsumer prices cooling near-term, the pressure on the Fed has increased. Withthe Fed opting for a larger .75% hike last time, the market is now anticipatingthe Fed to take further action this month, opting for a larger 1% hike, such aswe saw from the BOC yesterday. With this in mind, USD is seeing renewed demandinto the end of the week. Traders will now be looking to tomorrow’s retail salesdata for the next key insight into the US economy. If retail sales are seeingrising on the month, as forecast, this should keep USD higher into the FOMCmeeting.Technical ViewsNASDAQThe NASDAQ has been grinding steadily lower this year in awell-defined bear channel. Price is currently sitting on support along the11240.8 level, capped by resistance at 12269.1. With the channel the broaderfocus, the preference is for a downside break towards the channel lows and9801.1 level next. To the topside, bulls need to see a break of 12269.1 toshift momentum higher.

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