US30 IntraWeek. Long. R:R - 4:1

10 Nov 2021

After todays CPI announcement of YoY at 6.2% and MoM at 0.9% we saw the markets begin to selloff, including the US30. This however in my opinion will be short lived, with markets already starting to recover as there is simply so much money floating around the markets at this point in time. Jerome Powell is still the favourite to get reelected as the next FED chair for a variety of reasons such as: Biden can still point the blame to Trump as Trump installed Powell in the case anything goes wrong, Biden also cannot take full responsibility as he hasn't changed the appointee. Brainard who is also another favourite is also a centrist like Powell so we can expect the FED not to increase rates. This is well and jolly for the markets which were in shock today as the higher inflation - being blamed on consumers - however is mostly due to cost push effects is being passed onto consumers in the form of higher prices. Since the CPI number was 0.9%, expected was 0.6%, this caused a small selloff in the markets since higher inflation could signal tapering. However due to how much money is sloshing around out there we can expect this to not be the case and this to fizzle out as more buyers continue to buy the dip pushing the US30 to an even higher high. The doubt is simply what caused the selloff today so prepare to keep buying the US30 and adding longs when it dips as we are still in a bullish market.