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7:57 PM · 23 December 2022

Daily summary - Fed has more reasons to hike

  • US core PCE inflation dropped from 5.0 to 4.7% YoY, while market expected slowdown to 4.6% YoY

  • Headline PCE inflation dropped from 6.1% to 5.5% YoY, slightly bigger drop than expected

  • Nevertheless, from Fed's point of view, core inflation is key and it does not show signs of as strong slowdown as in case of CPI

  • University of Michigan index for December was revised higher, thanks to a drop in inflation expectations. 1-year inflation outlook was lowered from 4.4 to 4.6%

  • US new home sales increased in November while durable goods orders dropped 

  • US dollar gained and indices took a hit in response to US PCE data release. However, those moves were quickly reversed and now both US indices and USD trade more or less flat

  • Natural gas prices continued to drop, moving to the lowest levels since March below $4.9 per MMBTu

  • Declines on gas market were triggered by lower than expected draw in stockpiles reported yesterday as well as Freeport LNG expected to resume operations in January

  • Simultaneously, winter attack in the United States is boosting gas consumption what may boost prices in near-term

  • Oil WTI tested $80 per barrel area following news of increase in Chinese imports as well as an expected peak in Chinese infections

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