July CPI Meets Forecasts, September Fed Hike Odds Recede Further for CME
What happened
July inflation data arrived in line with consensus estimates, pushing market-implied odds of a Federal Reserve rate hike at the September meeting lower. Stable price readings reduce the urgency for additional monetary tightening. CME Group's exchange business is directly tied to rate-volatility driven trading volume, as futures contracts on interest rates represent a core revenue stream. Softer Fed-hike expectations generally compress near-term rate-futures activity, a dynamic CME management has previously acknowledged in earnings commentary.
The QL Read
With breadth nearly flat at 51.2% advancing and CME's composite signal sitting at a neutral 47/100, today's in-line CPI print lands in an indecisive tape. A sustained fade in rate-hike probability warrants watching CME's interest-rate futures volume figures as the next concrete signal.