Core Inflation Slowdown Hits a Snag, Dollar Rises Amid Fed Cut Uncertainties
| Action Insight Mid-Day Report 2-13-24 |
Core Inflation Slowdown Hits a Snag, Dollar Rises Amid Fed Cut Uncertainties |
Dollar rises significantly in early US session supported by the latest consumer inflation data, which also triggers a marked in DOW futures, dropping by over -300 points. Concurrently, 10-year Treasury yield is soaring near 4.3% mark. Most critically, the inflation data revealed that core CPI remained unchanged at 3.9% in January. This stagnation in core CPI—previously at 4% just three months ago and 4.3% six months back—sparked debates on whether disinflationary trends are stalling. This development would likely delaying any immediate Fed rate cut. Now, the May timeline for initiating rate reductions appears increasingly doubtful. Meanwhile, Sterling, currently as a distant second best performer after Dollar, was supported by robust UK employment data. Although the data revealed gradual easing of wage pressures, they are not decelerating as quickly as BoE had hoped. Additionally, the decline in the unemployment rate underscores a persistently tight labor market, likely to sustain wage inflation. Attention is now keenly directed towards wage settlements expected by April, with some financial analysts adjusting their forecasts for BoE's initial rate cut from May to later in the summer. However, Pound's robustness will still be tested by the forthcoming UK CPI tomorrow and Thursday's GDP data... |
EUR/USD Mid-Day Outlook Daily Pivots: (S1) 1.0750; (P) 1.0778; (R1) 1.0800; More... EUR/USD's fall from 1.1138 resumed by breaking 1.0722 support today. More importantly, current development argues that whole rise from 1.0477 has already finished. Intraday bias is back on the downside for 1.0447. On the upside, break of 1.0804 resistance is needed to signal short term bottoming. Otherwise, outlook will remain bearish in case of recovery. | |
| GMT | Ccy | Events | Actual | Forecast | Previous | Revised |
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| 23:30 | AUD | Westpac Consumer Confidence Feb | 6.20% | -1.30% | | 23:50 | JPY | PPI Y/Y Jan | 0.20% | 0.10% | 0.00% | 0.20% | | 00:30 | AUD | NAB Business Confidence Jan | 1 | -1 | | 00:30 | AUD | NAB Business Conditions Jan | 6 | 7 | | 02:00 | NZD | RBNZ Inflation Expectations Q1 | 2.50% | 2.76% | | 06:00 | JPY | Machine Tool Orders Y/Y Jan | -9.90% | | 07:00 | GBP | Claimant Count Change Jan | 14.1K | 15.2K | 11.7K | 5.5K | | 07:00 | GBP | Unemployment rate Dec | 3.80% | 4.00% | 4.20% | | 07:00 | GBP | Average Earnings Including Bonus 3M/Y Dec | 5.80% | 5.70% | 6.50% | 6.70% | | 07:00 | GBP | Average Earnings Excluding Bonus 3M/Y Dec | 6.20% | 6.00% | 6.60% | 6.70% | | 07:30 | CHF | CPI M/M Jan | 0.20% | 0.60% | 0.00% | | 07:30 | CHF | CPI Y/Y Jan | 1.30% | 1.60% | 1.70% | | 10:00 | EUR | Germany ZEW Economic Sentiment Feb | 19.9 | 17.5 | 15.2 | | 10:00 | EUR | Germany ZEW Current Situation Feb | -81.7 | -79 | -77.3 | | 10:00 | EUR | Eurozone ZEW Economic Sentiment Feb | 25 | 20.1 | 22.7 | | 11:00 | USD | NFIB Business Optimism Index Jan | 89.9 | 91.1 | 91.9 | | 13:30 | USD | CPI M/M Jan | 0.30% | 0.20% | 0.30% | | 13:30 | USD | CPI Y/Y Jan | 3.10% | 2.90% | 3.40% | | 13:30 | USD | CPI Core M/M Jan | 0.40% | 0.30% | 0.30% | | 13:30 | USD | CPI Core Y/Y Jan | 3.90% | 3.80% | 3.90% |
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