Despite the upward trend in the core CPI in the US, the expectation of a decrease in the headline inflation drags the dollar down, leading to the continuation of the rally in risky assets.
The Bloomberg Dollar Index, which tracks the course of the dollar against developed country currencies, fell 0.1 percent on the third trading day. The index records the longest series of declines in the last month.
Euro/Dollar US CPI climbed above 1.01 again with optimism and falconry ECB.
Stock indices also benefit from the positive atmosphere. The S&P 500 had its fastest four-day rise since June. The S&P 500 index ended the day up 1.1 percent on Monday, while its futures were slightly up. All major Stock Exchanges are rising in Asia Pacific.
Oil activity is calmer than Monday. Before the CPI data, ounce of gold is horizontal.
US inflation expected to decline on a monthly basis
The CPI data, which can be decisive in the Fed's September interest rate decision and subsequent moves, will be announced at 15:30 today.
The median expectation of 48 economists surveyed by Bloomberg indicates that US consumer inflation increased by 8.1 percent in August. The monthly median expectation is for a 0.1 percent decline. If the median expectation comes true, the US inflation, which peaked at 8.5 percent in July, will decline to 8.1 percent, revealing the picture that the peak is behind.
Rapidly declining gasoline prices play a role in this expected decline in headline inflation. According to Anna Wong, economist at Bloomberg Economics, the improvement in the supply chain of some sectors and the price cuts of companies to deplete their stocks may also play a role in the headline inflation decline. However, pointing out that core inflation is still on the rise, Wong says that core inflation will remain above the Fed's target for a long time with the tight labor market and the increase in wages.
CPI, which excludes food and energy prices, is expected to rise by 6.1 percent annually. Core CPI rose 5.9 percent in July. On the other hand, the New York Fed's consumer inflation expectations survey also points to a softening in expectations. The 12-month CPI increase expectation, which was measured as 6.2 percent in July, decreased to 5.7 percent in August.
Comments
No comment yet.