Odaily News The market reacted negatively to the latest US CPI data released on Wednesday, which showed that consumer prices rose 0.5% month-on-month, higher than expected and the largest increase in two years. This led to market expectations that the Federal Reserve will hold off on cutting interest rates for a while, according to CNBC.
"The initial CPI reaction was strong, but the market rebounded as investors adopted a more cautious attitude, realizing that more data was needed to confirm the inflation trend," said Min Jung, an analyst at Presto Research.
BTC Markets analyst Rachael Lucas attributed today’s market recovery to trading robots responding to stabilization of macroeconomic conditions. “Algorithmic trading plays an important role in these rapid moves, and many robots are programmed to react instantly to keywords from Powell, CPI data, and other major economic reports. Given the recent volatility driven by liquidations, any stabilization of macro conditions could trigger aggressive buybacks, especially from these automated strategies.”
Lucas explained that the market seems to be shaking off tariff-related concerns and digesting the latest CPI data, as prices are recovering without a prominent bullish catalyst. He pointed out that the rapid rebound of mainstream cryptocurrencies shows that investor confidence has increased, "Risk assets including cryptocurrencies have responded positively to the stabilization of macroeconomic conditions, and if liquidity conditions remain supportive, the market may be ready for the next move higher."
Jung also said that news that U.S. President Trump said Russian President Vladimir Putin agreed to discuss ending the war in Ukraine also added to investors’ risk appetite. (The Block)