US inflation preview

Matthew Ryan, CFA Ebury

Today will be all about the December inflation report out of the US economy (13:30 GMT).

One could argue that these figures have taken up slightly less importance - expectations for Federal Reserve rate cuts are so low that even a big downside surprise would likely do little to change the narrative. Yet, market participants will be watching the data closely nonetheless.

Consensus is for another print in excess of 3% in the core rate, with the main inflation measure seen ticking up to 2.9% (from 2.7%) that, if confirmed, would likely solidify bets for one or less cuts from the FOMC in 2025. Investors are unlikely to get a breather from major market moving news in the next few trading sessions.

Thursday will see the release of the December retail sales report, which is expected to confirm the resilient state of US consumer demand. We then have the small matter of the Trump inauguration on Monday.

Author

Matthew Ryan, CFA

Ebury

Matthew is Global Head of Market Strategy at FX specialist Ebury, where he has been part of the strategy team since 2014. He provides fundamental FX analysis for a wide range of G10 and emerging market currencies.

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