Core CPI

The weaker US inflation data supports our bullish EURUSD forecast: We think that the single currency is likely heading above $1.10 soon.

Core inflation rose to a fresh record high of 5.6%...

The December MoM CPI print was -0.1% . This is the first decline in the MoM print since May 2020!

Mexico’s Core CPI print was lower than the previous month for the first time since early 2021.

The risk to the CPI data is that it is much lower than expected.

Will the stronger Core CPI cause the Bank of Mexico to hike rates by another 75bps when it meets next Thursday?

The risk is that the prints come out higher than expected and high inflation lingers.

Today’s US data did little to help traders change their minds regarding the possibility of a 75bps hike at next week’s FOMC meeting.

June quarter Australian inflation data has surged to 6.1%, but below consensus expectations easing fears of a supersized 75bp rate hike when the RBA meets next week.

Although the June CPI reading for Canada was higher than the May reading, the headline was much lower than expected.

Annual CPI is expected to have accelerated to 8.8% in June from 8.6% in May.

Inflation is becoming more widespread across a broad swathe of consumer spending categories, raising the risk that it could become entrenched.

Tomorrow morning sees the release of March quarter Australian inflation data. It will likely be remembered as the final data point to confirm the end of an era of ultra-low interest rates in Australia and set the scene for an RBA interest rate hike as early as next month.

There was no “beat” of expectations as in the US and UK, and as a result, the Canadian Dollar sold off vs the US Dollar

USD/JPY fell below 113 for the first time in a month following strong producer prices. And we suspect that area will be pivotal around today’s inflation print.

With all the inflation data due out Wednesday, some currency pairs could get volatile