Today’s notable event is the release of the August US Consumer Price Index (CPI). It is the last important indicator ahead of the US FOMC monetary policy announcement on the 21st of next week. Right now, the short-term money market rate hike forecast has risen from 0.75% to 88%. At 0.50%, the degree of weaving is considerably reduced to about 12%. A consensus has been formed for a 0.75% interest rate hike.
The market forecast for today’s consumer price index is expected to be around +8.1% month-on-month, which is expected to slow down from +8.5% in the previous month. It is expected that the level will fall for the second consecutive month, and the sense that inflation has peaked is likely to strengthen. On the other hand, the core year-on-year rate of increase is expected to be +6.1% from +5.9% in the previous survey. Although gasoline prices continue to fall, a wide range of other inflationary effects are observed.
Going forward, if core inflation appears to be on a downward trend, the pace of US interest rate hikes is likely to slow down, but at this point it is premature. For that reason, if today’s core inflation figures fall below 6% unexpectedly, the market is likely to react to surprise dollar selling.
In addition to the above-mentioned US CPI, the economic indicators released in overseas markets after this are the German ZEW Business Confidence Index (September), the Eurozone ZEW Business Confidence Index (September), the US NFIB SME Optimism Index (August )Such. German business sentiment is expected to remain sluggish. The background is that Europe’s energy supply is extremely fragile compared to the United States. According to media reports, there is good news that Russian troops are withdrawing from some areas of Ukraine, but there is also a view that the Russian military is reorganizing its forces, and it seems that an early resolution such as a ceasefire is still far away.
August US Consumer Price Index (CPI) is expected to move the USD significantly, so be careful. Where I want to follow the movement after this.
