Inflation expectations for the coming year rose from 2.6% in November to 2.9% in December, reaching a six-month high. Long-term inflation expectations fell from 3.2% to 3.1%.
The University of Michigan noted: “A surge in purchasing terms for durable goods has pushed current economic conditions up by more than 20%. This increase in durable goods was not so much a sign of strength, but rather the result of the perception that buying durable goods now would allow buyers to avoid future price increases.”
The US Dollar Index tested session highs following the release of the better-than-expected Michigan Consumer Sentiment report. Currently, the US Dollar Index is trying to settle above the 106.00 level.
Gold lingered around the $2635 level as traders focused on the strong US dollar. Interestingly, government bond yields are falling, providing some support to gold markets.
SP500 tested the 6100 level as traders reacted to the encouraging report. Stock traders remain bullish and the rally continues.
Check out our economic calendar for an overview of all today’s economic events.