US inflation: Is the elusive peak finally here? – Forex News Preview



Following last week’s blistering jobs report out of the United States, investors will be turning their attention to Wednesday’s July inflation figures as bets of a 75-basis-point rate hike in September are back on. However, this time round, the CPI data, due at 12:30 GMT, might break with recent tradition and point to some cooling of price pressures. But what would a soft inflation report mean for the Federal Reserve? The US dollar’s post-NFP bounce back could be undone if the numbers show that inflation has likely peaked.

Is the US in recession or not?

A technical recession is defined as two consecutive quarters of contraction in economic output. So if the GDP data is to be believed, the American economy is already in recession. However, other indicators such as for consumption and employment suggest that the economy is still growing. Even forward-looking data like the PMI surveys point only to a slowdown and not a full-blown recession and the Fed seems to agree.

Fed policymakers have been downplaying the GDP estimates, highlighting the strong jobs growth and signalling the markets that there’s still a lot of work to be done to bring inflation under control. The latest nonfarm payrolls figures seem to back the Fed’s argument as the labour market added an astonishing 528k jobs in July, pushing the unemployment rate down to a new post-pandemic low of 3.5%. Perhaps, slightly more unnerving is the fact that wage growth also appears to be heating up again, having moderated somewhat after March.

Rate hike expectations are edging up again

Unsurprisingly, market expectations for a more aggressive Fed were bolstered after the jobs data, with investors lifting the odds for a 75-bps rate increase in September to 65% from around 40% before. However, there’s a risk those expectations will be pared back again if the CPI numbers confirm the prediction that inflation has likely topped out.

Amidst all the talk of recession and investors’ fear of overtightening by central banks, there’s been some glimmer of hope on the inflation front. The price components of the PMIs have come down substantially from their peaks, driven not only by the recent pullback in the major commodity prices, but also by the easing of supply constraints.

Have prices peaked?

It will probably take some time for the ebb in inflationary pressures to fully filter through the economy but where there is less of a lag is gasoline prices. Oil’s steady decline since the middle of June is now starting to make its way through at the pump across America. Apart from fuel, the other big generators of inflation in post-pandemic America have been rents and used car prices. There is increasing evidence that the former is on the way down and there are some signs that the used-vehicle market is normalizing too. Hence, the risk to the CPI readings seems tilted to the downside.

The consumer price index is forecast to have risen by 0.2% month-on-month in July – the slowest pace in almost a year, which would translate to a drop in the annual rate from 9.1% to 8.7%. However, there may be some bad news when it comes to underlying inflation. The core measure of CPI is expected at 6.1% y/y, which would mark a slight acceleration from the prior month’s rate of 5.9%, though the month-on-month rate is seen moderating from 0.7% to 0.5%.

Producer prices are also showing signs of having peaked. PPI for final demand due Thursday is expected to fall from 11.3% to 10.4% y/y, while PPI excluding food and energy is forecast to have declined from 8.2% to 7.6% y/y.

Dollar’s bounce has hit a wall

If there is a surprise miss in the headline CPI print, the dollar’s latest rebound against the Japanese yen would be at risk of faltering. The pair is already struggling after being capped by the 50-day moving average (MA) in the 135-yen region. Renewed selling pressure could push the dollar back down to the August trough of 130.39 yen.

However, a stronger-than-expected set of inflation data that comes hot on the heels of the stellar jobs report could help the pair break above the 50-day MA and have another attempt at hitting the 140 level, which it failed to do in July when the rally stopped at 139.39.

Inflation expectations matter too

If the CPI and PPI numbers fail to provide much clarity on where Fed policy is headed, investors will get another chance to gauge price pressures on Friday from the University of Michigan’s consumer sentiment survey. Last month, consumers’ one- and five-year inflation expectations measured by the survey eased slightly, adding to the growing momentum behind the view that the US is past peak inflation. A lot is riding on the August readings to confirm the downward trend in inflation expectations.

최신 뉴스

RBNZ to stick to its guns, eyes on guidance – Forex News Preview


Week Ahead – RBA and RBNZ to weigh 50-bps hikes but NFP report to set the mood


Can the RBA bring the aussie back to life? – Forex News Preview



Eurozone inflation set to hit a new record high as euro keeps tumbling – Forex News Preview

면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.

온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.

이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.

우리는 웹사이트에서 최고의 경험을 전해드리기 위해 쿠키를 사용하고 있습니다. 자세히 읽거나 쿠키 설정을 변경하세요.

리스크 경고: 고객님의 자본이 위험에 노출 될 수 있습니다. 레버리지 상품은 모든 분들에게 적합하지 않을수 있습니다. 당사의 리스크 공시를 참고하시기 바랍니다.