Forexlive European FX news wrap: Tight ranges as we await the US CPI 0 (0)

It’s been another dull session as we continue to wait for the US CPI release tomorrow. The price action remains rangebound in most markets.

The only notable news was about the China’s finance ministry holding a news conference on Saturday to
provide details on fiscal stimulus measures aimed at reviving the
faltering economy.

We had also some ECB speakers continuing to talk about the October cut which is already fully priced in by the markets. On the geopolitical front, nothing has changed as Israel has not decided yet on the scope and the timing for the retailiation against Iran.

In the American session, there’s no economic data to be released but we will hear from lots of Fed speakers. Finally, we will conclude with the FOMC Meeting Minutes later in the day, but as it’s almost always the case, they won’t matter.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

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Morgan Stanley expecting slight deceleration in tomorrow’s CPI 0 (0)

Morgan Stanley expects a slight deceleration in tomorrow’s headline inflation data.

Core CPI is projected at 0.26% MM and 3.2% YY

Headline CPI is projected at of 0.09% MM and 2.3 YY

The main components to watch for tomorrow:

  • Housing inflation is expected to soften, with rents anticipated to decelerate, particularly due to adjustments in the Owner’s Equivalent Rent (OER) calculations and seasonal factors.

  • Used car prices are expected to accelerate, which will push goods inflation into positive territory.
  • Car insurance is expected to continue its downward path, with car insurance expected around 13% YY (versus the prior of 17% YY).

In terms of the possible broader economic and Fed policy impact the bank suggests that the disinflation trend aligns with the Fed’s projections, and along with the solid labor market data should support the forecast of two more 25 basis point cuts in November and December.

This article was written by Arno V Venter at www.forexlive.com.

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Interest rate expectations for upcoming policy decisions 0 (0)

Implied rate expectations for the upcoming policy decisions for major central banks:

ECB: -25 basis points of easing implied for October 17th meeting (100% probability implied for a cut)

BoC: -32 basis points of easing implied for October 23rd meeting (100% probability implied for a cut)

BoJ: 1 basis point of tightening implied for the October 31st meeting (87% probability implied for a hold)

RBA: -2 basis points of easing implied for the November 5th meeting (91% probability implied for a hold)

BoE: -21 basis points of easing implied for the November 7th meeting (84% probability implied for a cut)

Fed: -22 basis points of easing implied for the November 7th meeting (88% probability implied for a cut)

RBNZ: -45 basis points of easing implied for the November 27th meeting (100% probability implied for a cut – almost fully priced for another 50bp move)

SNB: -30 basis points of easing implied for the December 12th meeting (100% probability implied for a cut)

This article was written by Arno V Venter at www.forexlive.com.

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