VOT Research Desk
Market Analytics and Considerations
In the midst of routine profit-taking as traders meet ahead of Thanksgiving week, commodity prices all but fell after an explosive start to November.
These large market moves have given wise merchants a progression of profoundly worthwhile chances to benefit from the new full scale driven rally as well as the immense cost inversion that has hence followed.
We repeatedly emphasized in this month’s reports that the commodity markets will move in a very predictable direction, making it possible for savvy traders to earn spectacular back-to-back gains of 10% or more almost every week. Again, everything we identified has transpired precisely as anticipated!
The adage “The trend is your friend” is well-known, and this may be especially true in today’s macro-driven markets, which move quickly, than at any other time in recent history.
After the highly anticipated U.S. Consumer Price Inflation reading rose less than expected in October, raising expectations that massive rate hikes are likely over, the catalysts that started the explosive move higher this month.
The Fed was relieved by the data from last week’s Consumer Price Inflation, which came in lower than expected. This could mean that October marks the beginning of a disinflationary trend that will continue into the following year.
The Producer Price Index, a key measure of wholesale inflation, increased by 8% in October, compared to an 8.4% increase in September, giving commodity prices yet another boost this week.
Although it was still historically high, it was significantly better than anticipated and represented the smallest increase since July of last year. This is the second consecutive inflation report this month to indicate a cooling in the economy’s price inflation.
In an effort to reduce inflation, the Federal Reserve has been aggressively raising interest rates for the majority of this year. The benchmark borrowing rate has been raised six times by the central bank, totaling 3.75 percent, with four rate increases of 75 basis points each.
Traders have begun pricing in the strong possibility that the Fed will only raise rates by half a percentage point in December following this week’s data .There is also an increase in the likelihood that the Federal Reserve will slow down the pace of rate increases even further, limiting them to a quarter point increase by the first half of 2023.
One thing applies to all of this. The final FOMC meeting of the year has now caught traders’ attention, and it is preparing to be the biggest trading event of this quarter, if not this year.
We are currently in the midst of “one of the greatest wealth transfers ever in history” as traders, and extraordinary times bring extraordinary opportunities. There is no better time than right now to create wealth that will change your life forever.
