-1699954299.png)
CPI in Sight
The US Dollar is trading lower today ahead of the upcoming October CPI release this afternoon. On the back of recent Fed commentary, the data is drawing plenty of attention and will be used as a strong benchmark for gauging whether the Fed will hike rates again this year. We heard from a slew of Fed members last week, including Fed chairman Powell who told markets that it was still too early to declare victory on inflation, warning that further tightening would be used if the Fed deemed it necessary.
Market Implications
On the back of those comments, the implications for today’s inflation data are very clear. If CPI is seen sticking around prior levels or making an unexpected move higher, Fed tightening expectations will jump leading USD higher also. On the other hand, if CPI is seen falling in line with projections, this should keep near-term Fed tightening expectations muted, leading USD lower through year end.
Today’s Forecasts
On the numbers front, the market is today looking for monthly CPI to fall to 0.1% from 0.4% on the headline reading and remain unchanged at 0.3% on core. The annualised figure is then expected to drop to 3.3% from 3.7% prior. Data in or below these levels should keep USD weighted near-term while any uptick will see December rate-hike pricing creeping higher.
Technical Views
DXY
The market remains hemmed in between the 104.95 support and resistance at 107.57. The prior bull trend having paused for two months now, risks of a deeper correction are growing, in line with falling momentum studies readings. If we break below 104.95, 103.48 is the next support to note.
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
With 10 years of experience as a private trader and professional market analyst under his belt, James has carved out an impressive industry reputation. Able to both dissect and explain the key fundamental developments in the market, he communicates their importance and relevance in a succinct and straight forward manner.