The inflation rate rose 5.4% in July
The United States just released reports on the inflation rate and the underlying inflation rate for July. The inflation rate rose 0.5% month over month, in line with analyst consensus.
On an annual basis, the inflation rate rose 5.4% compared to the analyst consensus which predicted growth of 5.3%. The core inflation rate rose 4.3%, in line with analyst consensus.
S&P 500 futures are gaining ground in pre-market trading following the release of inflation reports. Inflation has not risen, which is a major relief for traders.
Meanwhile, the US dollar found itself under pressure against a large basket of currencies. It appears that forex traders were expecting inflation reports to exceed analysts’ expectations, and they are being forced to cut their long bets on the US currency.
Precious metals gain ground after inflation reports
Gold and silver are up after the inflation reports were released as the US dollar is under pressure as Treasury yields fall.
The yield on 10-year treasury bills fell back below 1.35%, which is bullish for precious metals that pay no interest.
Yesterday, gold and silver mining stocks continued to decline. Today, they will have a good chance of gaining ground in case the US dollar and Treasury yields remain under pressure.
WTI oil declines as US reportedly asks OPEC to increase production
WTI oil attempted to stabilize below the $ 67 level after a CNBC report said the United States asked OPEC + members to increase oil production in order to put some pressure on gasoline prices.
Traders in the oil market are already nervous about the spread of the Delta variant of the coronavirus, so news of a potential increase in production easily puts pressure on the oil market.
However, it should be noted that it will be difficult to convince OPEC + to increase production as not all OPEC + members are allies of the United States. With this in mind, it remains to be seen whether the US effort will have a longer-term impact on oil prices.
For an overview of all of today’s economic events, check out our economic calendar.