Bond yields do not bother stock indexes. The market is waiting for inflation data from the US

The stock market seems full of optimism, setting and being close to its record levels in the United States and Germany, and close to this year's highs in Poland. Interestingly, for many days now the stock market has not been disturbed by the relatively high bond yields in the United States, which are around 4,18%. Since the end of October, bond yields and their decline until the end of December may have been largely responsible for the positive sentiment in the markets, but now they should probably look elsewhere.

Of course, it is still important AI mania, but also the general perception of the economic situation in the world. What we now seem to have is a belief that persistent and high inflation has been overcome without damage to the economy, high unemployment and recession (maybe except Germany). Therefore, investors can be very satisfied with this perception of the current situation. High yields in this picture of the economy are then more a reflection of expectations of solid economic growth and the search for higher rates of return on riskier assets and abandoning safe bonds in favor of them.

Waiting for today's inflation data from the USA

If the main driver for stock markets today is strong economic growth with moderate inflation, then today's data could be very interesting as inflation is expected to decline in the US. Goldman Sachs expects price growth by 0,2% m/m and 3,03% y/y. Wells Farbo has similar forecasts, and JP Morgan and Citi expect a greater decline in inflation. JPM assumes that inflation in the US in January increased only by 0,1% m/m and 2,9% y/y. and Citi sees a m/m increase of only 0,07%. The lower today's reading, the more it could affect bond yields, and in turn the US dollar, and its possible weakening could have a positive impact on risky assets.

The Warsaw Stock Exchange has a chance to go up

Looking at the contracts on Wig20 we can notice that a potential flag formation may form here from February 5. This is a corrective formation after the upward impulse that lasted since January 17. Therefore, if the support at 2317 points will still be defended by the bulls, which in turn will result in an increase of 2380 points. it may even open the way to 2437 points. Today's data from the US, if inflation falls more strongly than expected, may be a catalyst for this year.