Daily summary: Inflation data boosts USD

• US headline CPI inflation decelerated from 6.5 to 6.4% in January (exp. 6.2% YoY) while core gauge moved from 5.7 to 5.6% YoY (exp. 5.5% YoY)

• Higher-than-expected US CPI reading boosted hawkish bets in the markets, leading to a drop on Wall Street and strengthening of US dollar

• Moves, especially on the USD market, were further magnified by rather hawkish comments from Fed members - Logan, Barkin and Harker. All three signaled need for more tightening to bring down inflation

• However, comments can be as somewhat cautious as a 'data-dependant' mantra was present in all speeches

• Strong USD exerted massive pressure on precious metals with platinum dropping 2% and palladium trading around 4% lower at press time. Gold has managed to recover from earlier drop and is now trading 0.3% higher on the day

• US indices have erased a big part of earlier losses but still trade 0.1-0.4% lower. Nasdaq is an outperformer with a 0.2% gain at press time

• Stock markets from Western Europe finished the day higher with French CAC40 and UK FTSE 100 gaining 0.1% and Spanish Ibex rallying 0.7%. However, German DAX lagged and finished the day with a 0.1% drop

• In spite of rather risk-off moves on the global markets, cryptocurrencies trade higher. Bitcoin and Dogecoin trade around 2.1% higher each while Ethereum jumps almost 4%

• Energy commodities traded little changed. However, US natural gas was an exception as it jumped over 5% today. Jump in US natural gas prices can be explained with news of Freeport LNG terminal resuming exports

• Japanese GDP grew by 0.2% QoQ in Q4 2022 (exp. +0.5% QoQ)

• Euro area GDP grew by 0.1% QoQ in Q4 2022 (exp. +0.1% QoQ)

• UK average earnings growth decelerated from 6.5% in November to 5.9% YoY in December (exp. 6.2% YoY). Unemployment rate stayed unchanged at 3.7% (exp. 3.7%)

• Polish GDP shrank by 2.4% QoQ in Q4 2022 (exp. -0.4% QoQ)

EURUSD has been very volatile this afternoon following the release of the US CPI report for January. Pair tested the 1.08 mark in a knee-jerk move but bulls failed to hold onto those gains and EURUSD quickly pulled back below the 200-hour moving average (purple line). Source: xStation5