The moderation in inflation expectations | 27 June 2022

27 June 2022, USD/JPY

The moderation in inflation expectations

USDJPY trading plan:

U.S. consumer sentiment fell to a record low in June, but Americans saw a marginal improvement in the outlook for inflation, a survey showed on Friday, a rare silver lining for Federal Reserve policymakers as they assess how quickly they need to raise interest rates this year. The University of Michigan said its final consumer sentiment index reading for the month fell to 50.0 from 55.2 in May on the persistence of high inflation and rising fears of an economic slowdown. That compared with a preliminary reading of 50.2 earlier in June. The moderation in inflation expectations - particularly at the 5-year horizon - triggered a drop in yields on the Treasury securities most sensitive to Fed policy expectations. This is a good signal for the stock market and USDJPY, which has a correlation with the shares.

Investment idea: buy 134.87 and take profit 135.69.

David Johnson
Analyst of «FreshForex» company
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