Morning Note: U.S. Inflation Rises, Alibaba Earnings in Focus, and Oil Prices Dip

Investors Await U.S CPI Report

As of December 2024, the U.S. CPI rose by 0.4% month-over-month, following a 0.3% increase in November. This increased the annual inflation rate to 2.9%, rising from 2.7% in the previous month. Economists anticipate a slight decrease in January 2025 inflation rates. The annual CPI is expected to edge down to 2.8%, while core CPI is projected to decline to 3.1% from 3.2% in December.

(U.S Inflation Rate YoY, Source: Trading Central)

These forecasts suggest that inflationary pressures are gradually easing, aligning with recent trends of moderating price increases. However, uncertainties remain, particularly concerning potential policy changes and external economic shocks that could influence future inflation trajectories.

(U.S Dollar Index Daily Price Chart, Source: Trading View)

From a technical analysis perspective, the recent price action has broken below the ascending channel. It retested the channel but was rejected at the resistance zone, forming another lower high and driving the price further downward. The price is now approaching the swap zone. If this zone fails to hold as support, bearish momentum could regain control, pushing the price even lower.

Alibaba’s Q4 2024 Report in Focus

Investors are looking forward to Alibaba's upcoming financial report. Expected earnings per share are $3.08, an increase of 15.36% above the same period last year, while expected revenue is $38.19 billion, a year-over-year increase of 4.14%.

Apart from that, it is crucial to keep track of recent analyst estimate revisions for Alibaba. These changes tend to reflect changes in short-run business trends. Upward revisions signal relatively greater confidence in the company’s performance and profitability.

(BABA’s Share Price Daily Chart, Source: Trading View)

From a technical analysis perspective, the overall trend of BABA’s share price remains bullish, as indicated by the higher highs and higher lows within the ascending channel. The price is approaching the previous resistance zone. If it successfully breaks above this key resistance level with strong bullish momentum, it could potentially form another higher high, pushing the price further upward.

Oil Prices Decline as U.S. Stockpiles Rise

Oil prices declined on Wednesday after an industry report disclosed growing U.S. crude stockpiles, while tariff concerns weighed on market sentiment. This retreat came after three sessions of gains fuelled by escalating tensions in the Middle East and tightening sanctions.

Recently, Israeli Prime Minister Benjamin Netanyahu and U.S. President Donald Trump warned that the ceasefire in Gaza would end unless Hamas released Israeli hostages. This statement heightened fears of renewed conflict, potentially destabilising the Middle East, one of the world’s key oil-producing regions. Altogether, these factors could lead to significant volatility in oil prices.

(Crude Oil Futures Daily Price Chart, Source: Trading View)

From a technical analysis perspective, crude oil futures are in an upward trend, as indicated by the formation of higher highs and higher lows. However, in the near term, the price appears to be undergoing a bullish correction and trending downward. The price recently formed a higher low and rebounded upward but is currently moving within the swap zone. If it fails to break above this zone, there is a high probability that bullish momentum will weaken, allowing bearish forces to regain control and drive the price downward.

When considering shares, indices, forex (foreign exchange) and commodities for trading and price predictions, remember that trading CFDs involves a significant degree of risk and could result in capital loss.

Past performance is not indicative of any future results. This information is provided for informative purposes only and should not be construed to be investment advice.