Daily summary: Is this the peak of inflation?

US CPI inflation fell to 8.5% in July from 9.1%, stronger than expectations. The key factor in the inflation report, however, is that core inflation remained unchanged at 5.9% y/y and there was no change in monthly inflation, with a previous increase of more than 1%. 

The lower-than-expected inflation reading helped the valuations of equity markets, which mostly posted gains today. Germany's DAX gained 1.23%, and France's CAC 40 rose 0.52%. On Wall Street, the NASDAQ and the RUSSELL 2000 are the best performing indices, posting gains of more than 2%.

In the currency market today, we see broad weakness in the US dollar against other currencies.  It is losing more than 2% against the JPY or NZD, which is unusual in the currency market.

It is worth noting, however, that we are not seeing any change in the attitude of Fed members. Evans, known for his dovish stance, sees as much as 3.5% this year and 4% by the end of next year. The market, however, is no longer giving a 75bp hike a chance in September, although a lot can still change by then.

Crude oil stocks rose by almost 5.5 million barrels, but gasoline stocks fell by 5 million. The data show a massive implied increase in fuel demand and at the same time a sizable oil throughput. The data remain highly volatile since the EIA had a week-long data collection problem. Oil is finally rebounding after initial declines. Prices are up about 1.5%. Gains are basically observed across the entire commodities market, thanks to a very weak dollar.

Very good sentiment in the stock market also extended to cryptocurrencies. Bitcoin is currently gaining 3% and trying to break out above the $24,000 barrier. Ethereum is gaining more than 7.5% and has broken out above the $1,800 level.