Today, all eyes are on the release of the US Consumer Price Index (CPI) for January in the New York market. Expectations suggest a slowdown in both headline and core year-on-year growth, and any deviation from these forecasts is likely to trigger a sensitive market reaction. Market consensus anticipates a year-on-year increase of +2.9% for the headline figure (compared to the previous +3.4%) and +3.7% for the core figure (compared to the previous +3.9%). Month-on-month, forecasts are for a +0.2% increase for the headline and +0.3% for the core, consistent with the previous period.
While many US monetary policymakers argue that it is premature to begin interest rate cuts in March, short-term financial markets have priced in around a 13.5% chance of a 25 basis point cut. Expectations for May suggest nearly a 60% chance of a cut. The results of today’s Consumer Price Index will be closely watched to see if they prompt any significant changes in this outlook.
Before that, a series of UK employment-related indicators will be released in the early morning London time. It will be important to monitor indicators such as unemployment rate, employment change, and wage trends. Average weekly earnings are expected to show a slowdown in growth from +6.5% to around +5.6% year-on-year for the October to December period.
Additionally, the ZEW Economic Sentiment Index for Germany will be released. Market expectations anticipate some improvement, but given recent reports of a sharp decline in German commercial real estate prices, there may be concerns about weakening domestic demand.
Today, there is significant focus on the Consumer Price Index (CPI) release, and I plan to follow the subsequent USD movement closely.
Furthermore, with Swiss CPI lower than expected, there is increasing selling pressure. I intend to enter Swiss Franc selling positions accordingly.