European equities traded in the red at the start of the week, but equities in the US rebounded as investors are hanging on to hope of slower inflation and reasonably hawkish Federal Reserve (Fed) by their fingernails.

Today and tomorrow will tell whether they are right to be optimistic or not.

If, by any chance, we see a softer CPI figure, then the S&P500 could easily jump above its 200-DMA, and even above the ytd descending channel top.

But, but, but… today’s US CPI data, unless there is a huge surprise, will probably not change the Fed’s plan to hike the interest rates by 50bp this week.

Therefore, even if we see a great CPI print and a nice market rally today, it may not extend past the Fed decision on Wednesday.

In energy, US nat gas prices jumped more than 30% since last week due to a powerful Pacific storm bringing cold and snow to the norther and central plains in the US.

In the UK, power prices hit another ATH yesterday.

Happily, we haven’t seen a significant rise in the European nat gas futures, which in contrary kicked off the week downbeat.

But crude oil rallied as much as 2.60% on Monday on several factors that could however not lead to sustainable gains in the mid-run.

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