Get 40% Off
💰 Buffett reveals a $6.7B stake in Chubb. Copy the full portfolio for FREE with InvestingPro’s Stock Ideas toolCopy Portfolio

Crude Oil Adds Fuel to Inflation Fire - Further Monetary Policy Repricing Ahead?

Published 19/03/2024, 07:34
CL
-
US10YT=X
-
GPR
-

Stocks rallied on Monday, ahead of an eventful two days. Meanwhile, the market is also busy repricing its rate path for the Fed policy, with Fed Futures now seeing fewer than three rate cuts in 2024.Fed Rate Cuts

This appears to be due to a change in the market outlook for inflation, with 1-year inflation breakevens now at their highest since July 2022 and 1-year inflation swaps continuing to move higher today by 1.1 bps to 2.635%.US Inflation Swap

It looks mainly like this results from gasoline pushing higher again to $2.74.Gasoline Futures-Daily Chart

Alongside that, this also stems from oil moving up and clearing that consolidation zone at around $82.WTI Crude Oil-Daily Chart

Surprisingly, the US 10-year yield has behaved nicely, still below the 4.35% level.

US 10-Yr Bond Yield-Daily Chart

Remember that what matters most about the Fed and rates is that the market is repricing the path of monetary policy, and monetary policy works through financial conditions.

As the market reprices and adjusts, those conditions will tighten, and the tightening of conditions will impact the stock market.

Original Post

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.