May 22, 2024
U.S. CPI moderation and Bitcoin surge
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U.S. CPI Sees Modest Relief in April, Bitcoin Rises Post-Report

U.S. CPI Sees Slight Ease

In April, the monthly pace of inflation in the United States experienced a slight ease, as reported by the Government’s Consumer Price Index (CPI). The CPI rose by 0.3%, compared to March’s 0.4% increase and economists’ expectations of 0.4%. This data was reflective of small declines across various sectors, aligning with market forecasts.

CPI and Core CPI Figures

Year-over-year, the CPI showed a 3.4% increase, in line with estimates but slightly lower than March’s 3.5%. Core CPI, which excludes food and energy costs, also rose by 0.3% in April, matching expectations but lower than March’s 0.4% rise. On a year-over-year basis, core CPI showed a 3.6% increase, meeting forecasts but lower than March’s 3.8%.

Bitcoin Surges Following Report

Simultaneously, the price of Bitcoin (BTC) experienced a notable surge, increasing by more than 1% immediately after the release of the Wednesday morning report, reaching $64,700. This surge came amidst a period where Bitcoin’s price had been under pressure due to the expectation of sustained higher interest rates, with the spot ETF catalyst inactive due to slowed or reversed inflows.

Market Reaction and Conclusion

The release of the CPI report, coupled with retail sales data for April, led to a positive market reaction. S&P 500 futures rose by 0.5%, while the 10-year Treasury yield saw a seven-basis-point decline to 4.37%. Additionally, the U.S. dollar index fell by 0.5%, and gold prices increased by 0.7%.

The slight ease in U.S. CPI figures in April, alongside Bitcoin’s surge post-report, reflects ongoing market dynamics influenced by inflation expectations and monetary policy sentiments. The interplay between economic indicators and asset prices continues to shape investor sentiment and market movements in the current financial landscape.

Image by gstudioimagen on Freepik

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