In early Friday trading, the markets are relatively static as they wait, in anticipation, for today’s US inflation data that will potentially give confirmation that the FOMC will hike interest rates in December. According to the latest CME Fed Watch tool, there is an 88% probability of a rate hike in December. Thursday’s release of US PPI for September showed producers experiencing a 0.4% increase, in line with expectations, after a 0.2% increase in August. With producers experiencing inflation, the markets will now be looking at today’s CPI to see if such inflationary pressures are reaching consumers. It is, however, important to note that these particular data releases are likely to be “skewed”, as the US economy is still being impacted by Hurricanes Harvey and Irma.
The US Labour market is showing more resilience as Thursday’s Initial Jobless Claims from the US Labour Department showed a better than expected decline of 15,000 to 243,000 for the week ended October 7th – better than many had forecast. With fewer Americans seeking unemployment benefits (i.e. more in full-time employment), many expect this fact to also put more inflationary pressure on the US economy and provide more confirmation to the Fed that they can raise rates.
EURUSD is holding steady in early trading, currently at 1.1850.
USDJPY is 0.2% lower overnight, currently trading around 112.05.
GBPUSD is little changed overnight. Currently, GBPUSD is trading around 1.3275.
Gold is trading 0.25% higher, currently trading at $1,296.
WTI benefitted from the recent EIA data gaining 0.25% overnight. Currently, WTI is trading around $51.20.
Major data releases for today:
At 15:30 BST, the US Census Bureau will release Retail Sales (MoM) for September. Consensus is calling for a strong release of 1.7% compared to the previous release of -0.2%. If the release is >1.7% the markets will expect to see USD buying, as it will add to confirmation for a rate hike by the Fed before Year End as consumers are spending more and therefore adding to upward inflationary pressure.
At 15:30 BST, the US Bureau of Labor Statistics will release Consumer Price Index (YoY) and (MoM) for September, along with CPI ex Food & Energy, Core and n.s.a. Annualized CPI is expected to come in at 2.3%, a healthy improvement from the previous release of 1.9%. Month-on-Month CPI is also expected to come in higher at 0.6% from the previous release of 0.4%. As an inflationary indicator, releases above the expected will see USD appreciate.
FxPro UK Limited is authorised and regulated by the Financial Services Authority, registration number 509956. CFDs are leveraged products that incur a high level of risk and it is possible to lose all your capital invested. Please ensure that you understand the risks involved and seek independent advice if necessary.
Disclaimer: This material is considered a marketing communication and does not contain, and should not be construed as containing, investment advice or an investment recommendation or, an offer of or solicitation for any transactions in financial instruments. Past performance is not a guarantee of or prediction of future performance. FxPro does not take into account your personal investment objectives or financial situation. FxPro makes no representation and assumes no liability as to the accuracy or completeness of the information provided, nor any loss arising from any investment based on a recommendation, forecast or other information supplied by any employee of FxPro, a third party or otherwise. This material has not been prepared in accordance with legal requirements promoting the independence of investment research and it is not subject to any prohibition on dealing ahead of the dissemination of investment research. All expressions of opinion are subject to change without notice. Any opinions made may be personal to the author and may not reflect the opinions of FxPro. This communication must not be reproduced or further distributed without the prior permission of FxPro. Risk Warning: CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all your invested capital. Therefore, CFDs may not be suitable for all investors. You should not risk more than you are prepared to lose. Before deciding to trade, please ensure you understand the risks involved and take into account your level of experience. Seek independent advice if necessary. FxPro Financial Services Ltd is authorised and regulated by the CySEC (licence no. 078/07) and FxPro UK Limited is authorised and regulated by the Financial Services Authority, Number 509956.
Recommended Content
Editors’ Picks
EUR/USD retreats below 1.0700 after US GDP data
EUR/USD came under modest bearish pressure and retreated below 1.0700. Although the US data showed that the economy grew at a softer pace than expected in Q1, strong inflation-related details provided a boost to the USD.
GBP/USD declines below 1.2500 as USD rebounds
GBP/USD declined below 1.2500 and erased the majority of its daily gains with the immediate reaction to the US GDP report. The US economy expanded at a softer pace than expected in Q1 but the price deflator jumped to 3.4% from 1.8%.
Gold drops below $2,320 as US yields shoot higher
Gold lost its traction and turned negative on the day below $2,320 in the American session on Thursday. The benchmark 10-year US Treasury bond yield is up more than 1% on the day above 4.7% after US GDP report, weighing on XAU/USD.
XRP extends its decline, crypto experts comment on Ripple stablecoin and benefits for XRP Ledger
Ripple extends decline to $0.52 on Thursday, wipes out weekly gains. Crypto expert asks Ripple CTO how the stablecoin will benefit the XRP Ledger and native token XRP.
After the US close, it’s the Tokyo CPI
After the US close, it’s the Tokyo CPI, a reliable indicator of the national number and then the BoJ policy announcement. Tokyo CPI ex food and energy in Japan was a rise to 2.90% in March from 2.50%.