US CPI to test 90% odds of Dec Fed hike - ING

Sandeep Kanihama FXStreet Contributor

A subdued US CPI release this week (Wed) could test the 90% probability of Dec Fed rate hike priced into markets, according to analysts at ING.

Key Quotes

“We'll also get PPI data (Tue), as well as retail sales (Wed) - the latter expected to come in much flatter on the month after last month's strong hurricane-distorted figures. While the 'Big 4' central bankers will also see Yellen speaking this week, the greater focus will be on US politics, be it US tax reform or trade.”

“This week should see the House trying to pass its own version of the reform, though the more tricky Senate vote may not be seen until December. On trade, this week will see the fifth round of NAFTA talks taking place, with early signs that the US and Mexico are starting to lose patience with each other. An equity correction may be coming – but it is not obvious. DXY breaking under 94.25 would worry the bulls.”

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.

AUD/USD stays weak above 0.6900 after China’s trade data

AUD/USD struggles to capitalize on the previous day’s recovery and stays defensive on the 0.6900 level following the narrowing of trade surplus in China. Increased December Fed rate hike bets allows the US Dollar to pause its decline and weigh on the pair. US CPI data is next of note for the major.

USD/JPY retakes 158.00 on weak Japanese data; focus shifts to US CPI

USD/JPY attracts some dip-buyers and retakes 158.00 in the Asian session on Tuesday as a fall in Japan’s Household Spending offsets hawkish BoJ Summary of Opinions, undermining the Japanese Yen. Moreover, Fed hike bets support the safe-haven US Dollar and the currency pair. The market focus now shifts to the release of the crucial US CPI report.

Gold drifts lower as traders look to US CPI report for Fed rate cues amid Iran uncertainty

Gold meets with fresh supply, reversing a part of the previous day's strong move up to the $4,150 resistance zone amid a modest US Dollar uptick. Against the backdrop of firming US Federal Reserve rate hike expectations, mixed signals regarding the state of diplomatic talks between the US and Iran offer some support to the safe-haven Greenback. However, USD bulls seem hesitant and opt to wait on the sidelines ahead of US consumer inflation figures.

Bitcoin hits lowest weekly close since August as short-term holders slip into losses

Bitcoin fell below $75,000 on Tuesday, after recording its lowest weekly close since August as selling pressure pushed recent buyers into losses.

This weeks’ two big inflation reports will offer perspective

Payrolls on Friday surprised with a big gain, 165,000 new jobs rather than the 65,000 forecast. Also the unemployment rate fell from 4.2% to 4.1% although average hourly earnings are up only 0.4% ($32.75). This weeks’ two big inflation reports will offer perspective. Tomorrow it’s CPI and on Friday, which is a Friday the 13th, it’s PPI.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.