US inflation data ignored as trade talks in the spotlight
This afternoon's release of US inflation seems to have had little if any impact on the market, where the flat reading for September results in an unchanged annualised rate of 1.7%, compared to forecasts of a modest rise to 1.8%. As such, the USD is unchanged, having lost ground through the am session in London.
Later today, we have the US-China trade talks underway, and the market will be watching for any developments which relate to some of the rumours and reports, where China is expected to leave by the end of the day. There was also talk that the US may agree to a partial deal with the inclusion of a currency pact, but this is all hearsay as yet. More recently, China is reported to be set to ask the US to abandon its sanctions, though this seems unlikely to be agreed to given the hard-line stance pursued by the White House.
We are still seeing a mixed picture in FX, however, as the USD has weakened against the EUR this morning to push past the 1.1000 with little sign that it is set to come back any time soon. However, at the same time, we are making fresh gains vs the JPY as we continue to press into selling interest north of 107.50.