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RationalFX: US awaits inflation data

RationalFX: All eyes are on the US today, with the release of the latest inflation data. US CPI, an important inflation reading, is expected to rise 0.6% from the month previous.

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USD

Core CPI, which removes volatile factors like food and energy prices, is also set to rise 0.4% from the month previous.

The apparent inflation is running high and has been for some time. No doubt the transitory debate will certainly resurface after today’s readings with the Federal Reserve attributing the reading to supply chain issues and other temporary factors. We don’t see them altering their stance this month.

Two Fed members also spoke yesterday highlighting their main thoughts on the transitory debate. Mary Daly, San Francisco Fed President, said it would be ‘mid 2020 before there is more clarity on the employment and inflation outlook’. In addition, the Minneapolis Fed President, Neel Kashkari, said ‘forces that are keeping people out of the labour market and rising prices will be temporary’.

GBP

For the euro we see the release of finalised German inflation figures for October. This being said, we don’t expect much market movement as a result with the US inflation data the focal point of the day.

Key announcements

13:30 – US CPI m/m forecast 0.6 previous 0.4

13:30 – US Core CPI m/m forecast 0.4 previous 0.2

Source : ETFWorld.co.uk

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