Giles Coghlan LLB, Lth, MA
Financial Source
The US CPI print on Wednesday at 13:30 UK time sits in a light calendar week for US data. The CPI print is likely to draw significant attention tomorrow to see how the US is doing in its fight against inflation.
Headline inflation is expected to fall again
Over the last year, headline inflation has been consistently falling in the US month over month. Today’s print is expected to show another drop with expectations of a 3.1% print which is down from the 4% prior.
The core inflation print has remained stickier in the US, as it has throughout many other major Western economies. The current reading is 5.3% and that is expected to fall lower to 5%.
-638247456940374363.png)
What’s likely to move markets
The financial source team has a handy economic data tracker tool that shows the minimum and maximum expectations for the data print. This is helpful in assessing which data releases are needed to surprise markets.
For the headline reading, a print below 2.9% and a core reading below 4.9% will both be below the minimum expected from the economists surveyed. In the case of a low print, investors will be carefully watching gold for potential gains. However, be aware that a lower CPI print has been expected all week, so a ‘buy the rumour, sell the fact response’ is also possible.
If the reading comes in above market expectations with a headline reading above 3.3% and a core reading above 5.1% then the USD could find strength again along with yields which would be a natural headwind for silver and gold. Note how gold is around a key daily trend line right now, and traders will likely use this as a reference point for risk. See it marked on the gold chart below.
-638247457258182815.png)
Our products and commentary provides general advice that do not take into account your personal objectives, financial situation or needs. The content of this website must not be construed as personal advice.
Recommended Content
Editors’ Picks
EUR/USD nears 1.1200 after US PCE inflation data
EUR/USD approaches 1.1200 following generally softer-than-anticipated US inflation-related figures. The pair lacks momentum amid tepid European data undermining demand for the Euro. Still, optimism weighs on the USD.
GBP/USD battles the 1.3400 level for a definitive bullish breakout
GBP/USD advances modestly beyond the 1.3400 level after US PCE inflation data showed price pressures continued to recede in August. Sterling Pound aims for fresh yearly highs beyond the 1.3433 peak posted earlier this week.
Gold hovers around $2,670 as US Dollar resumes decline
Gold price retains its bullish bias near fresh record highs, as demand for the US Dollar remains subdued following US PCE inflation figures. The strong momentum around stocks limits demand for the safe-haven metal.
Week ahead – NFP on tap amid bets of another bold Fed rate cut
Investors see decent chance of another 50bps cut in November. Fed speakers, ISM PMIs and NFP to shape rate cut bets. Eurozone CPI data awaited amid bets for more ECB cuts. China PMIs and BoJ Summary of Opinions also on tap.
RBA widely expected to keep key interest rate unchanged amid persisting price pressures
The Reserve Bank of Australia is likely to continue bucking the trend adopted by major central banks of the dovish policy pivot, opting to maintain the policy for the seventh consecutive meeting on Tuesday.
Five best Forex brokers in 2024
VERIFIED Choosing the best Forex broker in 2024 requires careful consideration of certain essential factors. With the wide array of options available, it is crucial to find a broker that aligns with your trading style, experience level, and financial goals.