Today, the US Consumer Price Index in January will be the focus of attention. I would like to check the reaction of the market along with the result. According to the preliminary forecast, the year-on-year rate is + 7.2%, which is expected to accelerate further from the previous December + 7.0%. The previous figure was also the highest rate of increase in about 39 and a half years. The year-on-year forecast for core is + 5.9%, which is also expected to rise further from the previous + 5.5%. In addition to soaring energy prices, supply bottlenecks and labor shortages have made rising prices persistent.
The problem is the reaction of the market that received the result. It is straightforward to think that if the deviation from the forecast deviates upward, it will buy the dollar, and if it deviates downward, it will sell the dollar. In the case of high attention, there were often cases where the reaction was sensitive even with a deviation of 0.1 percentage point.
However, if the market attitude seems to have penetrated, there is a possibility that the reaction will be weak. In any case, it depends on the deviation from the forecast.
Along with the reaction of the dollar market immediately after the announcement, we would like to pay attention to the change in the degree of incorporation of the rate hike toward the March FOMC meeting. According to CME Fedwatch, as of yesterday, the 50bp rate hike was over 20% and the 25bp rate hike was just under 80%. The inclusion of a 50bp rate hike is lower than when the US employment statistics were released.
Although there are no plans to give a lecture, it is possible that comments from US financial officials regarding the results of the US Consumer Price Index may be reported. The announcement is scheduled for 10:30 pm Japan time.
With the situation of the US consumer price index, the next rate hike forecast will come out, so the USD will move significantly. Attention is required.
