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Bank of Japan keeps policy unchanged, upgrades FY22 and FY23 inflation outlook to 1.1%

US CPI Steady Ahead of the Fed

US CPI Steady Ahead of the Fed

Gregory Marks,

Talking Points:

-CPI MoM came in flat below estimates of 0.1%, but better than the -0.1% print prior

-CPI Ex Food and Energy YoY met expectations of 1.7%

-CPI YoY stands at 1.2% vs. 1.3% expected and 1.0% prior

U.S. Consumer Price Index data for the month of November released Tuesday morning slightly missed expectations on the month over month figure, but the fact that we did not see a repeat of last month’s negative MoM reading kept market volatility at bay. The reading that excludes food and energy came in better than expected MoM at 0.2% vs. 0.1% expected as WTI crude prices fell to 6 month lows in November.

Being the last major data print out of the U.S. ahead of Wednesday’s rate decision, the FOMC will face a strong few weeks of data that include better than expected NFP, ISM, GDP and this stable CPI data. Although economists surveyed by Bloomberg do not see a reduction in asset purchases at this meeting, 10yr U.S. Treasury yields are slightly below the September highs where a taper was expected.

The Consumer Price Index is an economic measure for differences in prices in the U.S. either on a month over month or year over year basis. The index tracks a basket of goods and services and is meant to give an overall picture of price changes in the economy.

Dow Jones FXCM Dollar Index (Ticker: USDOLLAR) (5-Minute Chart)

US_CPI_Steady_Ahead_of_the_Fed_body_Picture_2.png, US CPI Steady Ahead of the Fed

Source: FXCM Marketscope

As traders await the Fed’s rate decision tomorrow, price action remains limited following the print, although 10yr Treasuries saw a run up to over 2.88% minutes before the release and continue to remain elevated moving into the NY session.

US_CPI_Steady_Ahead_of_the_Fed_body_Picture_1.png, US CPI Steady Ahead of the Fed

Gregory Marks, DailyFX Research Team

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