US: Core inflation set to remain below target - Westpac

Sandeep Kanihama FXStreet Contributor

Analysts at Westpac expect the US headline and core CPI outcomes to be soft in October, with both likely to print at 0.1%.

Key Quotes

“On both a CPI and PCE basis, there is no cause for concern on inflation.”

“September's headline CPI outcome was dominated by Hurricanes Harvey and Irma. Following a 0.4% gain in August (also hurricane affected), prices rose 0.5% in September. That left the annual pace at 2.2%yr.”

“Of the monthly gain, 75% of the increase reportedly came from a surge in gasoline prices after refining operations were heavily impacted by the weather.”

“Abstracting from this factor, inflation pressures remained benign. The core CPI rose by just 0.1%, leaving the annual rate unchanged at 1.7%yr for a fifth consecutive month.”

Author

Sandeep Kanihama

FXStreet Contributor

Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.

EUR/USD remains bid, focus stays on 1.1900

EUR/USD has broken its two-day run of losses and is ticking modestly higher on Thursday, hovering around the 1.1880 area as the US Dollar struggles to find clear direction. Weekly Initial Jobless Claims rose more than expected, taking a bit of shine off the Greenback, but markets are largely in wait-and-see mode ahead of Friday’s US CPI release.

GBP/USD sticks to the bid bias, still below 1.3700

GBP/USD is trading with decent gains around 1.3650 on Thursday. Indeed, Cable is attempting to shake off the weakness seen earlier in the week amid another choppy session for the Greenback, while a run of disappointing UK data has so far failed to derail the pair’s tentative recovery.

Gold recedes slightly, trades below $5,100

Gold remains stuck in choppy trade on Thursday, deflating marginally just below the $5,100 mark per troy ounce as the US Dollar drifts without a clear trend. Softer US Treasury yields across the curve are offering some support, but with markets treading carefully ahead of Friday’s US CPI release, conviction remains limited and price action continues to look hesitant.