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JPM Trading Desk Sees 85% Odds CPI Print Will Push S&P At Least 1.5% Higher

Tyler Durden's Photo
by Tyler Durden
Tuesday, Jan 10, 2023 - 04:40 PM

Ahead of our full CPI preview (due tomorrow), here is a snapshot of what the market expects the CPI report to looks like on Thursday at 8:30am: consensus is for Headline YoY +6.5%, Core YoY +5.7%, Headline MoM -0.1% (this would be the first negative sequential CPI print since August and only the second since the covid crisis).

How will the market react to a print that will likely determine whether the Fed hikes 25bps or 50bps in three weeks? According to Bram Kaplan, Head of JPMorgan's Equity Derivatives, the options market is pricing in ~2% excess move. He summarizes the various implied kneejerk moves across asset classes in the table below:

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