• CPI readings from the US should be crucial for USD
  • US retail sales data could be distorted to some extent given the impact of the hurricanes
  • A few central bankers are out today

The CPI figures form the US are in the spotlight today as the inflation has become the crucial issue for Fed in regard to rate hike path. Hence, it’s a very significant event for the USD. Moreover, we get the retail sales data also from the US. Keep in mind that the reading could be afflicted by the hurricanes, hence it ought to be treated with a grain of salt. Besides, there are a few central bankers out today and the preliminary UoM indices for October will be published as well. 

1:30 pm BST – US, CPI. We have already the data on employment and business activity but actually it’s inflation that is now critical for the Fed so the CPI data will be of high importance. Do notice that markets expect both the headline and the core (ex food and energy) measure to increase compared to August (2% and 1.8% y/y respectively). Therefore it will be an important test for the greenback. Even if the hike in December was a done deal investors need to determine if 3 more moves in 2018 (as it’s been suggested by some FOMC members) could be justified. It’s also worth mentioning that the producer inflation figures, which were out yesterday, pointed out on rising pressure on prices. 

1:30 pm BST – US, retail sales. The retail sales data could be affected by hurricanes again but it’s typically an important report for the markets as well. In this case the consensus calls for an increase of 1.7% m/m, whilst the previous reading showed a contraction of 0.2% m/m. Markets like Gold, Tnote and USDJPY could be affected.

3:00 pm BST – US, University of Michigan survey of consumer sentiment. This will be a preliminary check of what happened in October. The measure of consumer sentiment is seen to slightly retreat from 95.1 to 95.0 pts. Moreover, investors should also look at inflation expectations. 

6:00 pm BST, data on oil rig count in the US. The number of rigs renewed declines last week even amid relatively high prices. Unless we see a reversal of this trend, oil prices might find too few arguments for a larger pullback

There are also a few central bankers out today. It’s especially worth tracking the ECB’s members as we got new reports on possible changes to the QE programme. 

  • 10:30 am BST – ECB’s Mersch
  • 1:30 pm BST – Fed’s Rosengren
  • 3:15 pm BST – ECB’s Constantio
  • 3:25 pm BST – Fed’s Evans
  • 4:30 pm BST – Fed’s Kaplan
  • 7:10 pm BST – BoE’s Saporta

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 USD index (USDIDX on xStation5) found a support yesterday. Stronger CPI and retail figures may push the index back to 23.6% Fibo retracement. Source: xStation5



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