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Tonight at 20:30, the highly anticipated U.S. July Consumer Price Index (CPI) data will be officially released. Currently, the financial markets have exceptionally strong expectations for a Federal Reserve rate cut in September, with traders raising the probability of a rate cut in September to 88%.
However, there are still many uncertainties in the current economic situation. Predictions show that the July CPI may increase by 2.8% year-on-year, up from 2.7% last month. More importantly, the core CPI is expected to grow by 3.0%, a value that remains well above the Federal Reserve's target inflation rate of 2%.
It is worth mentioning that the U.S. Labor Department recently adjusted its CPI calculation method, with approximately 35% of the June data being estimated values, which may affect the accuracy of the data. If the data released tonight falls short of expectations, the likelihood of a rate cut in September may significantly decrease.
In terms of market reaction, the Nasdaq Index and the S&P 500 Index have slightly declined in pre-market trading. Given the recent release of economic data and the significant market volatility, instances of large fluctuations in both directions are not uncommon, so investors should remain cautious when making trades.
For the cryptocurrency market, if the CPI data is significantly lower than expected, it may stimulate short-term price fluctuations of digital assets such as Ethereum (ETH). However, given the current market uncertainty, investors are advised to carefully assess risks before making any investment decisions.
Overall, tonight's CPI data will undoubtedly be a key factor influencing the short-term direction of the market. Regardless of the outcome, it will provide us with important clues about the health of the U.S. economy and the future direction of monetary policy.