Soon, the CPI data will be released, and the market could move quite drastically. I see the forecast range is fairly wide, from 25,000 to 50,000. This is the time to manage risk properly and not take positions that are too large.

Before we panic, we should first understand what CPI is. Many traders don’t really care much about this economic indicator, even though its impact on the market can be significant. CPI is an abbreviation for Consumer Price Index, or Indeks Harga Konsumen in our language. Basically, it measures the price changes of goods and services consumed by people, and it becomes the main benchmark for assessing a country’s inflation level.

Why is CPI important? Because central banks usually use this data to decide whether to raise interest rates, lower reserve requirements, or take other macroeconomic actions. Their decisions directly affect the market, including capital markets and stocks.

If CPI keeps rising, it means the prices of consumer goods are increasing, people’s purchasing power is decreasing, and the value of money becomes weaker. For example, if CPI rises by 2.3% year-on-year, that means 100 yuan you received last year can now only buy goods worth 97.75 yuan. Situations like this create economic instability and market turbulence. This is what investors need to watch out for.

On the other hand, if CPI falls, prices for goods become cheaper, people’s purchasing power increases, and overall well-being improves. But don’t get too excited yet—if price declines go too deep and last too long, producers will suffer losses, production enthusiasm will drop, supply will decrease, and unemployment will rise. So there’s a trade-off here.

For the stock market and asset markets, the relationship with CPI is indirect but real. In general, rising CPI means asset prices go up, while falling CPI means asset prices go down. Investors will shift toward instruments with higher returns if inflation keeps increasing. The bottom line is that CPI is an indicator you can’t ignore if you’re serious about trading or investing.

So tonight, don’t make impulsive decisions. Wait for the data to come out, watch how the market reacts, and manage your positions wisely. Anything can happen, so stay alert and keep a tight control on your risk.