CPI Misses, Everything (But the Dollar) Rallies–Market Reactions

[Redator]

US Consumer Prices came in notably weaker than expected.

Specifically, Core CPI, which was anticipated at +0.3% month-over-month, registered +0.1% month-over-month, bringing the year-over-year figure to 2.8%.

Headline CPI also showed a softer reading, at 0.1% m/m against a 0.2% expectation.

Markets had remained subdued at the beginning of the week in anticipation of this data, which provides further clarity on the Federal Reserve's dual mandate. As a reminder, last week's Non-Farm Payrolls report surprisingly beat expectations, coming in at 139K versus a 130K consensus.

The market has reacted positively to this news. A strong employment backdrop coupled with easing price pressures presents an ideal scenario for the economy and significantly alleviates concerns about stagflation.

Expect upcoming months' CPI reports to create similar reactions in terms of volatility!

June CPI Data, June 11, 2025 – Source: MarketPulse Economic Calendar

Market Reactions on the charts

Looking at the reactions from the charts, it seems like the market would have been less surprised by a beat than a miss – These asymmetrical expectations create quite volatile movements, there will be a lot of movement today.

Nasdaq Breaks 22,000

Nasdaq 15m Chart, June 11, 2025 – Source: TradingView

Gold and US Bonds rally

This piece of news allows the pricing of more cuts, great news for both bonds and gold

Gold 15m Chart, June 11, 2025 – Source: TradingView

US 10Y Bond 15m Chart, June 11, 2025 – Source: TradingView

The US Dollar Takes a hit on lower inflation, More cuts get priced

Dollar Index 15m Chart, June 11, 2025 – Source: TradingView

The piece of data largely invalidates the Inverse Head & Shoulders that was building as more cuts get priced in.

I still don't expect the FED to cut on June 18th and expect board members to say that they welcome the news but are waiting for the release of more data – In the meantime, markets are still euphoric all-around.

Commodities and Cryptos are also rallying with WTI up 2% on the session.

Safe Trades!

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