There are expectations for CPI data, but don't expect too much in the short term. The new round of BTC main wave begins and the bull market still sees the June-August range. The market currently expects a 100% chance of a rate cut in September and December.

The US CPI and core CPI in April both fell slightly, in line with expectations, and inflationary pressure eased marginally. After the data was released, expectations for a rate cut by the Federal Reserve increased significantly. The market currently expects a 100% chance of a rate cut in September and December. Looking ahead, market sentiment is expected to be boosted by this data in the short term, but the risk of US inflation has not been completely eliminated. Our calculations show that the US CPI and core CPI may still be around 3% year-on-year at the end of the year, and we need to be vigilant about whether subsequent inflation data will exceed expectations again.

1. The US CPI in April was 3.4% year-on-year, and the core CPI was 3.6% year-on-year, both in line with expectations, down 0.1 and 0.2 percentage points from the previous month, respectively. Prior to this, both were higher than expected for four consecutive months. Excluding food, energy and housing, the "super core inflation" was 0.10% month-on-month, lower than 0.13% in the previous two months, indicating that inflationary pressure has eased marginally.

2. After the data was released, the US stock market and gold BTC market rebounded, the US dollar and US bond interest rates fell, and the expectation of interest rate cuts increased significantly. At present, the market expects that the probability of the Federal Reserve cutting interest rates by 25bp in September and December has reached 100%.

3. Although the CPI data performed well this time, other indicators reflect that the inflation situation is still not optimistic, for example: 1) The three-month month-on-month annualized rates of CPI and core CPI are still as high as 4.7% and 4.2%; 2) The manufacturing and non-manufacturing PMI price indices have rebounded sharply; 3) Consumers' one-year inflation expectations have continued to rise since the beginning of the year and remain above 3%.

4. According to our latest calculations, the year-on-year growth rates of the US CPI and core CPI in May were about 3.3% and 3.4% respectively; the year-on-year averages of the CPI in 2024Q1-Q4 were about 3.2%, 3.3%, 2.9%, and 2.9% respectively, and the year-on-year growth rates of the core CPI were about 3.8%, 3.4%, 3.3%, and 3.2% respectively.

5. This data has eased the market's inflation concerns, but whether the market sentiment can continue to recover still depends on the performance of subsequent data. Short-term focus: US PCE inflation in April on 5/31, US ISM manufacturing PMI in May on 6/3, US ISM non-manufacturing PMI & ADP employment in May on 6/5, ECB interest rate meeting on 6/6 (high probability of interest rate cut), US non-farm employment in May on 6/7.

Finally, I want to tell my brothers: the bull market is still there, and there is nothing wrong with building positions on dips.