US CPI will be the main focus today – Danske Bank

Analysts at Danske Bank offer a brief preview of Thursday's release of the crucial US consumer inflation figures for September, due later during the early North American session.

Key Quotes:

“We forecast both headline and core CPI below consensus expectations at +0.2% in m/m SA terms (consensus 0.3%). The energy price contribution remains positive and used car prices have edged slightly higher lately, but the shelter component continues to put downward pressure on inflation figures. Gradually cooling wage growth points towards further easing in core services CPI excl. shelter as well, which remains the key point of focus for the Fed.”

“The FOMC minutes were much in line with expectations stating that policy should remain 'sufficiently restrictive' for some time to return inflation to 2%. Most members saw one more hike as most likely going ahead, but data dependence and a cautious approach going forward was clearly underscored as the guiding principles. Markets price only a small chance of another Fed hike, which we agree with as we believe the Fed is done. Still data on inflation and employment will be key for whether the Fed decides to add another hike or not.”