Daily summary: lower core inflation drives Wall Street optimism 📈

American indices are rising strongly today due to lower core inflation in December. The US500 is up over 1.5%, while the US100 gains nearly 2.0%. Today's gains on Wall Street are the highest since the post-election session in the U.S. in November 2024.

DE40 gained nearly 2% today, similar to Poland's W20. DE40 exceeds previous all-time highs and is trading above 20,700 points.

CPI inflation in the U.S. came in at 2.9% year-over-year, in line with expectations, rising from 2.7% year-over-year. On a monthly basis, it was a 0.4% month-over-month increase.

Core inflation was lower at 3.2% year-over-year, compared to expectations and the previous level of 3.3% year-over-year. On a monthly basis, it increased by 0.2% month-over-month, also lower than expectations.

The lower core inflation increased expectations for interest rate cuts in the U.S. Currently, the first cut this year is expected in the first half of the year, whereas earlier projections pointed to September.

EURUSD rose to 1.0350 at the time of publication, but later the dollar strengthened, and the pair is now below 1.0300.

American banks started the earnings season today, reporting generally better-than-expected financial data.

JP Morgan, Goldman Sachs, and BNYM reported revenues and profits exceeding expectations. GS reported record revenues from equity trading. Mixed results came from Wells Fargo, the largest retail bank. Despite strong net interest income, revenues fell short of expectations.

Goldman Sachs is up over 5% today due to results significantly surpassing expectations.

Tomorrow, the earnings reports continue, including TSMC, which could influence sentiment in the semiconductor sector. Expectations point to another record-breaking quarter for the semiconductor production leader.

Approximately two hours into the U.S. session, information emerged about a ceasefire agreement in the Gaza Strip and a hostage exchange. The agreement is set to take effect on Sunday. Initially, oil prices fell, but uncertainty about the agreement's adherence remains. Gold is rising, nearing $2,700.

Oil prices remain high, with WTI crude testing around $79.5 per barrel. DOE data showed crude oil inventories dropped by just under 2 million barrels per day—less than indicated by the API report. Additionally, refined product inventories increased significantly.

Inflation in the U.K. fell significantly below expectations. The headline reading came in at 2.5% year-over-year, against expectations of 2.6% year-over-year. Core inflation dropped to 3.2% year-over-year, compared to an expected decline to 3.4% year-over-year from 3.5% year-over-year.

The data release momentarily weakened the pound, but GBPUSD is rebounding today, even reaching 1.23 due to dollar weakness. Earlier this week, the pair tested 1.21.

Inflation in Spain rose as expected to 2.8% year-over-year, from 2.4% year-over-year, while inflation in France remains at 1.3% year-over-year.

CPI inflation in Poland slightly declined to 4.7% year-over-year, against expectations of holding steady at 4.8% year-over-year. Monthly inflation was 0.0% month-over-month.

Cryptocurrencies are gaining, supported by better sentiment in the stock market. Investor optimism is fueled by the upcoming inauguration of Donald Trump on Monday. At the time of publication, Bitcoin is up 2.64% to $99,100, Ethereum 3.92% to $3,390, and the capitalization of the remaining altcoin market is up 4.54%.

Projects related to artificial intelligence, including popular frameworks or infrastructure for AI Agents, are gaining the most.