Title: U.S. CPI, TerraUSD De-Pegged, Disney Earnings - What's Moving Markets

May 11, 2022 06:49AM ET

By: AnalysisWatch

The United States will release inflation figures for April, and the world is desperately looking for signs that price inflation in the United States has peaked. However, stocks will open higher as a 75 basis point increase in U.S. interest rates seems like a remote possibility. Walt Disney reports after the bell. Oil prices rise as Shanghai reports no new COVID cases, while the war in Ukraine disrupts European gas flows for the first time. Here is the key information on the financial markets on Wednesday, May 11.

The overall U.S. inflation rate is expected to have eased in April, as last year's increase in used car prices is no longer included in the year-over-year calculations.

If the consensus forecast of a decline from 8.5% in March to 8.1% at 8:30 a.m. ET is confirmed, there could be some much-needed relief in the bond and equity markets. However, the more important numbers will likely be the month-over-month increases, where CPI growth is expected to accelerate from 0.3% to 0.4%. The overall consumer price index is expected to slow significantly from 1.2% to 0.2% due to energy prices.

A series of speeches by Federal Reserve officials on Tuesday indicated that the Fed is not currently thinking of putting a 75 basis point rate hike back on the table, although Cleveland's Loretta Mester cautioned that one should "never say never."

Others pointed out that the Fed's actions are already fueling the housing market, which is likely to be underscored by the weekly mortgage application numbers (which will be released at 7 a.m. ET).