The “Put de la Fed” is back: if Tuesday’s inflation report is bad waiting for chaos on the markets

Why all the optimism?

Because investors believe that the American federal reserve will almost certainly reduce interest rates in September, and they hope that the consumer price inflation ratio – tomorrow – will not show a significant increase in inflation.

According to JPMorgan: “We expect a moderate weakening in macro-data, according to JPMorgan:” We expect a moderate weakening in macro-data, but enough to trigger a fast Fed response “in September, according to Fabio Bassi and its colleagues.

Analysts’ consensus is that inflation will accuse 0.3% to 3%, according to ING, a sufficiently low increase for the Fed to be unable to ignore it in favor of reduction rates. The low job report on August 1 was such a surprise that the central bank should now ignore a small amount of inflation in favor of supporting the economy with a new cheaper money dose.

“The US CPI report of tomorrow … could prove to be one of the biggest events in the summer for the markets,” Jim Reid and his Deutsche Bank team told Jim Reid this morning.

If the IPC increases by 0.3% or less, “it is a number which can probably be considered acceptable for the federal reserve to make a September cup (90% at the price), taking into account the backdrop of a much lower job market,” said this morning this morning.

There is another reason why investors are so confident that Cut arrives next month: President Trump added Stephen Miran as a governor of the temporary Fed. They consider him as a single mission, to persuade the Federal Open Markets Committee to reduce rates and weaken the dollar.

“Stephen Miran made the headlines earlier this year for proposing an` `Mar-A-Lago agreement ‘to weaken the dollar and stimulate American exports. Although the administration has not officially adopted the idea, its appointments are clearly not sick with the strength of the dollar,” said George Vessey de Converra in an email this morning. “Miran’s position is aligning firmly with the dominable camp.”

Of course, the reverse is also true. If this inflation report is higher than the expectations tomorrow, the prospect of a reduction in September could disappear, which will probably cause a drama and the sale tomorrow morning.

Here is an instantaneous action before the opening bell in New York:

• Future S&P 500 were flat this morning, pre-market, after the closure of the 0.78% index on Friday.
• Stoxx Europe 600 was flat at the start of trading.
• The FTSE 100 of the United Kingdom increased by 0.25% at the start of negotiations.
• Nikkei 225 from Japan increased by 1.85%, reaching a new summit of all time.
• CSI 300 from China increased by 0.43%.
• South Korea Kospi dropped by 0.1%.
• Nifty 50 of India increased by 0.69%.
• Bitcoin increased to $ 121.6,000.