(News Bulletin 247) – Wall Street should regain height on Wednesday at the start of the session, investors welcoming the announcement of a slowdown in inflation which shows that the action of the Fed is bearing fruit.

About half an hour before trading kicks off, futures are signaling the New York indices open up 0.5% to 0.6%.

The Labor Department announced this morning that the consumer price index (CPI) rose only 0.1% in March, after rising 0.4% in February.

The basic or ‘core’ CPI index, which excludes the volatile elements of food and energy, also decelerated, returning to +0.4% last month, against +0.5% in February.

US government bond yields fell on the release of the statistic, suggesting that the Federal Reserve may now begin to deviate from its continued monetary tightening path.

“Inflation has now been slowing for nine consecutive months, which means that the effects of the Fed’s tightening are paying off,” said Srijan Katyal, trader at ADSS.

“In light of these numbers, the likelihood of further significant rate hikes from the Federal Reserve seems much less likely,” he adds.

“It would be a welcome development for all those who are calling for a calmer, more serene approach from the Fed after the banking crisis that shook the world in March,” concludes the strategist.

Inflation figures are also weighing on the dollar, which is accentuating its decline against the euro, the single currency rising to around 1.0975 while the yield on ten-year Treasuries has fallen to 3.37%.

On the oil front, Brent and US light crude are regaining ground driven by renewed risk appetite sparked by inflation data.

The price of a barrel of American light crude oil (WTI), which has climbed a lot for a month, rose 0.6% to 82 dollars pending the publication, during the morning, of weekly oil stocks in the United States.

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