Waiting for U.S. CPI Data on Otherwise Light Load of Released Indicators
October 13, 2022
Equities fell sharply in Asia but are modestly higher in Europe and U.S. futures trading. Analysts expect today’s monthly release of U.S. consumer price figures to show a dip in overall inflation but higher underlying price pressure during September.
The dollar overnight lost 0.4% against sterling and 0.3% versus the euro and measured by the weighted DXY index. The yen has hovered narrowly near closing level of 146.9, finding support just slightly above the Asian crisis low of 147.6. Oil and gold are relatively steady, and the 10-year U.S. Treasury yield is marking time ahead of the CPI news as well.
In contrast, the price of Bitcoin broke through the $19,000 threshold to post a 2.3% drop to $18710, and the 10-year British gilt yield dropped 14 basis points amid mixed signals regarding the Bank of England’s commitment of support.
Swedish consumer prices rose 1.4% on month in September, lifting the 12-month inflation rate by a full percentage point to a 483-month high of 10.8%. Core CPI climbed to 9.7% from 9.0% in August and 3.1% in September 2021.
Irish CPI inflation fell for a second straight moth to a 4-month low of 8.2% last month but remains well above its 3.7% on-year pace in September 2021.
Japanese producer prices reaccelerated in September with a 0.7% month-on-month increase and the highest 5-month on-year advance (9.7%) since April. Augmented by yen weakness, import prices jumped 4.7% on month and 48.0% on year.
The combined Swiss PPI/import price index posted an 8-month on-year low of 5.4% in September due to a dip in import price inflation to 8.8% along with unchanged domestic producer price inflation of 3.8%.
New Zealand food price inflation lat month matched August’s 157-month high of 8.3%.
German CPI inflation in September has been confirmed at the preliminary estimate of 10.0%, up sharply from 7.9% in August and 4.1% in September 2021. This is the highest level since before the unification of East and West Germany some three decades ago. Consumer prices rose by 1.9% compared with August’s level.
Portuguese CPI inflation of 9.3% last month also represents a three-decade high and matches its preliminary estimate. There has been a sixfold intensification of inflation from 1.5% in September 2021.
FOMC minutes released Wednesday afternoon point to more 50 to 75 basis point interest rate hikes at upcoming meetings and a likely cresting of the federal funds rate within a 4.5-4.75% corridor, 150 basis points above the current level. Future U.S. data and the evolution of expected inflation will dictate the exact path that is taken. Labor market conditions will be especially influential.
The British Royal Institute of Chartered Surveyors’ monthly housing index fell sharply further in September to a 26-month low.
Copyright 2022, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: German CPI, U.S. CPI
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