Markets are generally steady ahead of today’s US inflation figures although today’s US data was firm. The headline PPI rose 0.4% mm, 2.6% yy in September, up from 0.2% mm and 2.4% yy in August while the. Core CPPI rose 0.4% mm and 2.2% yy, up from 0.1% mm and 2.0% in August, beating expectation of 0.2% mm, 2.0% yy. The weekly Initial jobless claims dropped 15k to 243k as the impact of the hurricanes faded and notably better than expectation of 253k. In the currency markets, the main mover has been Sterling, which jumped by more than a cent to reach an eight-day high against the dollar on the back of a report in Germany’s Handelsblatt newspaper that the EU could offer Britain a two-year transitional Brexit deal. The US$ is slightly firmer while stocks are a little lower. Commodities are mixed, with the main mover being WTI, down 1.4% on the back of an IEA report which forecast further weaker global oil demand.
The release of the US CPI (exp 0.6%mm, 2.3%yy; ex F/E, 0.2%/1.8%)and Retail Sales (exp 0.4%mm; ex-auto 0.3%) later today will be pivotal for the markets as traders make up their collective minds as to whether the Fed will or will not raise interest rates in December. Ahead of that, Asia gets to see the NZ Business PMI, the Australian Financial Stability Report and the China Trade Balance for September (exp +US$39 bio). The focus in Europe will be on the German CPI (exp 0.1%mm, 1.8%yy) but that is about it and all will depend on the US data.
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