Today's main event will be the CPI release at 2:30 CET which will reveal the month-to-month and year-to-year change in the price consumers pay for a specific group of goods and services. The data release is primarily relevant as it influences the decision of the FED regarding interest rates, or at least influences speculations by investors regarding this decision that will be announced in the next FOMC meeting on December 18th. There is currently a strong consensus of 86% that a 25bps rate cut will be announced next week. The more speculations towards more rate cuts, the better for speculative assets.

Therefore, we want to see a CPI print that supports this consensus, which would be CPI below the expectations of 2.7% or at least in line with expectations. Although CPI above expectations would not be ideal, I think the markets have somewhat priced it in already, as we have seen a retrace in stock markets and the crypto market over the last days, which is why I believe that it would not lead to a significant drop in the markets, unless numbers are missed by far. Nevertheless, the latter still remains the least favourite outcome as it could increase uncertainty, at least in the short-term. Good numbers should lead to a broade relief in the market given all the de-risking that happened in the last two days.