Tonight 20:30 showdown: CPI

The FX market is already gearing up, ready to weather a storm of heavy volatility.
For crypto markets, although there is an escalation in the US-Iran conflict affecting things, and MicroStrategy’s Bitcoin sell-off has had an impact, the market has still remained resilient and held onto a choppy, range-bound trend. Even the 1h/2h indicators have been repaired repeatedly, back and forth.
It hasn’t shown sensitivity to these data at all.

Last night, after the US and Iran both announced the blockade of the Strait of Hormuz, crude oil surged by 5$+.
The magnitude of the move is not comparable to the gains during the US-Iran war in March—back then, after the conflict broke out, within about a week crude oil basically jumped between 50%-100%!
It shows the market’s current “immunity” has developed some antibodies.

Back to the main topic: tonight’s CPI data. The consensus expectations are all for a decline—this is the first decrease after four months of consecutive rebounds. As time goes on, crude oil prices are expected to stay under control, or move up and down around the $70 level, which is also normal.
So for Uncle Sam’s inflation going forward, there’s reason to expect it can be brought under control.

In the past two days, the US-Iran escalation has made everyone worried about the outlook and increased the probability forecasts for this week’s rate hikes. The current estimate is a 50% chance of a rate hike.
My view is that the interest rate will still be kept unchanged, with a very low probability of an increase. What we have now is more like a transmission belt—continually testing how much pressure the market can withstand.

Tonight’s reported number may be slightly higher than the market expectation, but it should still be lower than the prior value. The overall signal from the data transmission should still be “continue to observe,” not “hike immediately.”

So although attention is high, a rate hike won’t happen right away—this gives the market some breathing room.

Under the market trend of gradually probing lows in July, there will be a need for a rebound pullback to provide buffering and restore indicators.

Therefore, if the reported value comes in lower than the prior value, it can be viewed as an excellent opportunity for short-term indicator repair. You can actively squat into the market around this key support level to lay out some short-term rebound opportunities.

As for how the market performs after tonight’s release when it’s actually implemented, we can update our thinking again!

For now, for the intraday, I’ll follow this approach.

‍#美国六月CPI即将发布