US Producer Prices Offer No Clues On Tomorrow's CPI Release

Published date: 10/10/2018

This week's headline data release out of the US comes out on Thursday when we get the latest Sep reading of consumer price inflation (CPI). As a usual precursor, we get a sense of how this may play out with some clues from producer price inputs, though the data has come in as expected at 0.2% on the month, though the annualised rate dips from 2.8% to 2.6%.  

Looking ahead, the forecasts for tomorrow's number are concentrated on a fall from 2.7% to 2.4%, and this may well see the USD ease off again as US implied rates may react negatively. As we know, the USD has been rising off the back of higher yields, with yesterday's pullback seeing a brief sell-off in the USD.  

Not too much of a reaction to this afternoon's release, with the major pairings all sticking to established ranges. EUR/USD tested briefly above 1.1500 this morning, though is back under this level, sticking close to the figure as we note some large expiries coming off here at the NY cut (10.00am NY time - 3.00pm London).  

USD/JPY is still trying to edge higher again after its dip under 113.00. We expected a little more follow through on the downside, yet as with US stocks, the pair keeps bouncing back up despite extended levels. As such, the focus will be on Wall St when the cash markets open later today, dictating near-term direction which we expect may be limited ahead of more US data to come tomorrow.  


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