The US stock market closed lower on Wednesday (09/08/23) with the Nasdaq leading the decline by 1.2%, a day after data showed that Americans’ credit card transactions last quarter were at an all-time high; as well as a day ahead of the US Inflation announcement which will heavily influence the Federal Reserve’s interest rate decision. The Federal Reserve Bank of New York said US credit card debt surpassed USD 1 trillion; on the other hand, Philadelphia Fed President Patrick Harker said the US central bank may be in a position to keep interest rates at current levels, at the September FOMC Meeting. Market participants are pricing in a probability of 86.5%, according to the CME FedWatch Tool. US CPI for July, due later on Thursday night at around 19:30 GMT, is expected to show a slight acceleration from a year ago, at a rate of 3.3% yoy. On a monthly basis, consumer prices are predicted to increase by 0.2%, the same as in June. Core CPI (July) which is also a concern is expected to tame slightly to 4.7% yoy, from 4.8% in June. In addition to Inflation data, Initial Jobless Claims will be highly highlighted by market participants with predictions coming out at 230K, slightly stronger than the previous week at 227K. Speaking of CPI in Asia, China experienced deflation in July. The consumer price index fell in the world’s second-largest economy, said the National Bureau of Statistics, the first decline since February 2021. China’s CPI came in at -0.3% yoy in July, further weakening from June’s already zero percent position; although on a monthly basis, there was a slight improvement to 0.2% from minus 0.2% in the previous month (the first positive growth in 6 months). Japan this morning reported July producer-level inflation (PPI) at 3.6% yoy, slightly higher than expected. Domestically, Indonesia reported stronger Retail Sales in June at 7.9% compared to the previous month at -4.5%. However, this has not been able to boost motorcycle sales as the latest growth stands at 45.6%, a 3-month low. On the commodities side, the US unexpectedly reported oil inventories of 5.850 million barrels, well above expectations of just half a million barrels. The US produced 12.6 million barrels of oil per day during the last week (Aug. 4), as reported by the EIA’s Weekly Petroleum Status Report; which is a three-year high in recent years. Interestingly, this did not prevent the price of US West Texas Intermediate or WTI, crawling up 1.6% to USD 84.4/barrel, its highest point since last November.

Considering the sentiment rolling in the market, NHKSI RESEARCH estimates that JCI consolidation will soon make a decision in 1-2 days, whether to break MA10 Resistance or break MA20 Support in a very narrow range: 6885-6875. Investors/traders are advised to maintain a Wait & See for a bit longer before making any substantial investment/trading decisions.

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