United States: September inflation profile – TD Securities

FXStreet Insights Team FXStreet

TD Securities economists Oscar Munoz and Eli Nir provide an early projection for United States (US) September Consumer Price Index (CPI , expecting Headline CPI to rise 0.54% m/m, driven mainly by an almost 8% jump in gasoline and firmer food prices. They see Core CPI slowing to 0.20% m/m, with services inflation mean-reverting and supercore easing after August’s surge.

Headline and core inflation projections

"Following the release of the August CPI report, we are providing an early look into our September projection based on multiple assumptions which may evolve as the month progresses and more data becomes available — particularly for volatile segments like gasoline prices, hotel rates, and airfares."

"Headline inflation is expected to gain additional strength in September rising 0.54% m/ m after increasing at an also strong 0.40% m/m in August (CPI NSA index: 336.510 vs the market's current fixing at 336.600). A close to 8% m/m increase in gasoline prices will act as the key culprit, with food inflation likely also accelerating."

"Our preliminary forecast for the September core CPI stands at 0.20% m/m (down from a firmer 0.29% in August), which would be consistent with a core PCE increase at 0.25%."

"Core goods prices likely increased modestly again with tariff-exposed categories moving largely sideways. Additional strength in both new and used vehicle prices is expected to boost goods inflation."

"Services inflation is projected to mean-revert following last month's telephone-services driven surge. Shelter likely saw some cooling on the back of another subdued rise in OER and hotel rates inflation losing speed at the margin. Medical care services and still-firm airfares are also expected to lift inflation in the segment."

"All of this should result in supercore CPI inflation slowing to a more manageable 0.23% m/m in September after unexpectedly surging to 0.51% in August."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)

Author

FXStreet Insights Team

FXStreet

The FXStreet Insights Team is a group of journalists that handpicks selected market observations published by renowned experts. The content includes notes by commercial as well as additional insights by internal and external analysts.

AUD/USD hangs near three-week low, below 0.6950 as traders await US NFP report

AUD/USD hits a three-week low during the Asian session on Friday as the RBA’s dovish shift and a rout in equity markets weigh on the risk-sensitive Aussie. However, the recent slump in US bond yields to a two-month low keeps US Dollar bulls on the back foot and limits losses for the currency pair as traders look to the US NFP report for a fresh impetus.

USD/JPY bounces off three-week low; keeps the red near 157.65 as focus remains on US NFP

USD/JPY bounces off the weekly low set during the Asian session, as bears turn cautious ahead of the US NFP report due later this Friday. The upside seems limited as the recent slump in US bond yields and hopes of Iran war de-escalation undermine the US Dollar. Moreover, a hawkish BoJ and intervention risks support the Japanese Yen, capping the pair.

Gold loses the grip; $4,000 comes next on the downside

Gold sets aside two daily advances in a row on Friday, opening the door to a potential test of the key $4,000 mark per troy ounce. The precious metal’s retracement follows a decent improvement in the sentiment surrounding the US Dollar, solid NFP data and higher US Treasury yields across the board.

Democrats win House and Senate in US midterms: Why isn’t all bad news for crypto

The biggest story this week was Tuesday’s US midterm elections, which saw Democrats win control of both the House and the Senate in a clear blue wave. This political shift in the US has triggered sharp price swings across the cryptocurrency market.

Week ahead – Inflation and geopolitics in focus as US political landscape shifts

Post-midterm election euphoria fizzles out as risk aversion prevails. US CPI, PPI and Fedspeak on the radar as Fed hike bets remain supported. Oil retreat pauses on mixed hopes about the ongoing conflicts.

US Dollar breaks below 101.50 as Democrats sweep Congress

The US Dollar (USD) comes under heavy selling pressure on Wednesday, with the US Dollar Index (DXY) falling around 0.5% to trade near 101.35 after sliding below the 101.50 level. The Greenback retreats to its lowest level in four weeks as investors reassess the political and economic outlook following the Democratic Party's sweeping victory in the United States (US) midterm elections.