Some observers remain skeptical about the sustainability of this inflation-driven rebound, arguing that the collapse in oil prices mainly contributed to the slowdown in cost of living growth in June and that the recent rebound in oil makes this data obsolete.
“The 3.5% [CPI] This figure is explained by a 10% drop in gasoline prices through June, and this trend had already reversed before the report was published, with Brent at its highest level in a month while the situation in Hormuz worsens,” Ryan Lee, chief analyst at crypto exchange Bitget, said in an email.
“Markets are recovering from a June snap, while July is moving differently and the July print will be the first to carry the war bounty,” Lee added.
Jasper De Maere, an over-the-counter trader at market maker Wintermute, also called for caution, while acknowledging an inflation-driven rebound and profit-taking near $65,000.
“While the inflation data is truly constructive and the positive headlines are very refreshing, it is worth noting that the context has not brightened with the US strikes on Iran now in their fourth consecutive day, and the Fear and Greed Index has only increased from 22 to 25, still extreme fear. A low CPI reading against active military escalation is not the same as lasting regime change in appetite for risk,” he said in an email.
