George Austin’s Post

GBP CPI TODAY The markets are expecting the CPI comes lower since sterling fell 0.03% to $1.2705 ahead of UK inflation data due later today Which comes before a policy decision by the Bank of England (BoE) on Thursday, where rates are expected to remain on hold.

The US CPI data, due on October 10th, will be keenly watched for further clues on potential FED rate cuts. The Dollar Index has paused ahead of the data release. The chances of a 50 bps rate cut in November 2024 are now near zero. The ECB may be forced to cut rates in the next meeting, as there is a possibility that inflation may fall below the 2% tolerance limit. With Brent Crude hitting $81.16 this morning, there should ideally be pressure on the rupee to breach 84. However, it seems the RBI is not ready yet. The rupee opened around 83.93, with a likely range for the day between 83.90 and 83.97.

Turkish annual consumer price #inflation dropped a bit more than expected to 51.97% in August, data showed on Tuesday, continuing a sharp drop since May due to base effects and price relief on food. Month-on-month, August consumer price inflation (#CPI) was 2.47%, also below expectations, according to the Turkish Statistical Institute, partly reflecting a gas price hike. In July, monthly CPI inflation was 3.23%, with the annual rate at 61.78%. #Turkey Central Bank of the Republic of Türkiye

The ECB looks set to cut interest rates (blue line) for the first time since 2019 on Thursday, but what will the rate path be like after June? Market implied rates now price less than 60 bps of cuts this year as of May 31, but there is much uncertainty about this. Given the weights of the main components of the euro area CPI (green line), it will be important to observe changes in service and gas prices. Service inflation in the Euro area rose to 4.1% in May 2024, the highest in seven months, from 3.7% in April, while TTF price is rising since February 2024 (red line). If this will remain the trend in the coming months, then it is likely that we will see no more than two cuts by the ECB.

Rate Cuts - Pre-US CPI % expectations for the ECB (70.9), Fed (34.5), and BOE (61.8) of rate cuts before the end of June. It will be interesting to see how this looks tomorrow post CPI. 

All eyes are on January’s CPI report tomorrow to see whether core inflation conditions eventually cool. If they do, markets have significant headroom to price BoC easing back in. https://loom.ly/U2t-aSY #cpi #inflation #loonie #cad #dollar #boc #bankofcanada #fxmarkets #financialservices #foreignexchange #fxtraders

EURO area has seen inflation cool down Q1 of 2024 and this leads to possibility of Rate cuts in the next ECB meeting. Will today's Final CPI add a weight to that?

UK CPI data this morning came in at 1.7%, below the consensus estimates of 1.9%. This is the first time inflation has been below the BOE’s 2% target in over three years. The expectation of rate cuts towards the end of the year has now increased. We have also seen the GBPUSD rate take a hit, trading below $1.30 for the first time since 20th August.

What you need to know about today UK CPI release? - UK March CPI data shows that inflation is still quite sticky, particularly as the core reading at 4.2%, albeit slowing, was higher than expected. - The area that’s likely to worry, however, is the services inflation reading of 6%. While it has slowed a little from February’s 6.1%, but only marginally and is above the 5.8% expected. - As of Tuesday’s close, rate traders expected the central bank to reduce rates in September, as Ven Ram points out, and saw about 41 basis points of easing by December, according to swaps tied to meeting dates. That may be pared even more after today’s CPI data. - The inflation readings showed that the biggest downward contribution to the monthly change came from food, with prices rising by less than a year ago. Meanwhile the largest, partially offsetting, upward contribution came from motor fuels. #CPI #UK #GBPUSD