📊#CPIWatch | Will September’s CPI change the course of oil and Treasury bonds?
My base case is inflationary pressure, but confirmation is still pending. The market consensus points to year-over-year headline inflation of 3.7% in September, up from 3.4% in August. Energy is once again a critical variable, although the core reading will be key to determining whether inflationary pressures are spreading. Source: Investopedia.
🛢️ OIL — $BZ
If CPI comes in above expectations and geopolitical tensions keep supply risks elevated, I would look for confirmation of an upside breakout before opening a LONG position. If the data disappoints in a way that is negative for oil and the price loses key support levels, I would avoid chasing the move.
📉 TREASURY BONDS — $TMF / $TBT
A hotter CPI reading could push yields higher and pressure bond prices: • TBT: potential bullish scenario if yields rise; an inverse ETF with risks and leveraged daily performance. • TMF: potential bearish scenario if yields rise; a leveraged ETF that can amplify losses.
⚠️ I wouldn’t assume that a single release guarantees another Fed rate hike. Core inflation, monetary policy expectations, and the trajectory of long-term yields also matter.
🎯 My plan: wait for the data, observe the initial reaction, confirm the direction, and manage risk with a defined stop. Don’t trade based on headlines or use excessive leverage.
The opportunity isn’t in guessing the CPI: it’s in reacting to the surprise better than the market.
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