American FX Outlook: The US PPI whispers higher inflation ahead of Fed rate hike

What you need to know

• The US dollar is narrowly mixed on Tuesday ahead of expected Fed rate hike on Wednesday. European major central banks are meeting on Thursday with both the Bank of England and the ECB seen keeping their monetary arsenal in check.
• The UK inflation rose to the highest level since March 2012 in November prompting the Bank of England Governor Mark Carney having to write an explanatory letter to Philip Hammond.
• With Fed rate hike being priced in, the US PPI is set to provide only complementary information about how the inflation evolves on factory gate side.

Tuesday’s market moving events

• The US PPI is seen rising 0.3% m/m while rising 2.9% over the year in November.
• The ECB President Mario Draghi is scheduled to give a short speech on the occasion of the closing of the Cultural Days and the handover from Spain to Lithuania organized by the ECB in Frankfurt at 19:00 GMT. 
• The RBA Governor Philip Lowe is due to deliver a speech titled "An eAUD?" at the 2017 Australian Payment Summit, in Sydney at 22:15 GMT. 

Major market movers

• The antipodeans AUD and NZD are both on the run on Tuesday appreciating broadly against other majors.
• ECB President Mario Draghi speaks later on Tuesday with speech expected to be rather ceremonial, with no much direct impact on EUR/USD.

Earlier in Asia/Europe

• French non-farm payrolls rose 44.5K and 0.2% q/q in Q3 2017.
• The UK CPI rose 3.1% over the year coming in above market expectations and prompting the Bank of England Governor Mark Carney having to write an explanatory letter to Philip Hammond, the UK Chancellor of Exchequer. Core CPI adjusting the consumer basket for food and energy items remained at 2.7% in November.
• German ZEW index of investor sentiment decelerated to 17.4 in December as expectations subindex decelerating and the ZEW index thus still remaining below the long-term average of 23.7 points.