Thursday's Markets Update (Jan 12, 2023)

12 Jan 2023 by rate3

Thursday, Jan 12, Bureau of Labor Statistics reported core inflation rate's decrease to 5.7 percent in December (compared to Nov's 6.0 in yearly terms). It matched expectations and led to 'sell-the-news' short-term correction on the morning session. Then, Bulls gained it back fast, brining NASDAQ to 11K.

However, despite CPI decrease (to consensus' 296.8), 'core CPI' (less food and energy) expanded by 0.3 percent, while +0.2 was expected. Importantly, its 'service' part (notably, shelter and transportation) surged 0.8 and 0.2 percent (on a monthly base), correspondingly. That is the fastest increase for the past six months. It won't be taken lightly by Powell and might factor heavily in FOMC's 1st-of-Feb decision on the rate's next hike (0.5 instead of 0.25 points).

Moreover, Department of Labor's release showed 205K of initial jobless claims for the first week of 2023. Claims' 4-week moving average is 212.5K. It undershot analysts' expectation of 214.5K. The labor market's resilience only strengthens Committee Board's hawks resolve.

At the same time, the postponed new-year's bullish exuberance is rising on markets, including crypto. It is visible on most graphs in daily frames, which attracts more traders. That creates the dissonance between markets' medium-term and short-term momentums and leads to higher volatility, which is more pronounced on BTC charts.

On Thursday's session NASDAQ was trading between 10797 (low) and 11027 (high) (2.1 percent gap), while BTC showed 17925 as session's low and 19060 as its high (the gap of 6.3 percent).