- European index contracts open higher
- CPI inflation reading from the US, the main driver of volatility in the afternoon part of the session
- Fed forecast update and Powell conference in focus for investors
Futures for European indices are trading up today, recovering from yesterday's declines, despite a weak Asian session, where Chinese benchmarks cheapened after inflation data from China. Inflation data from the world's largest economy will be at the centre of investors' preoccupation today; the consensus is for CPI inflation to come out unchanged in y/y terms, although month-on-month it will rise less than before. In contrast, expectations for the core reading (excluding food and energy prices) suggest a decline from 3.6% to 3.5% today and unchanged monthly growth. In the second part of the session, the market will turn its attention to the Federal Reserve's new inflation forecasts, which bankers will update for the first time since March.
US rates will almost 100% be left unchanged, but Powell's tone may suggest that the Fed is willing to 'pull the string' and postpone cuts even until next year, if price pressure data from services and the US labour market (higher wages) remain stubbornly high. On the other hand, Powell may signal that the quite disappointing latest US GDP reading, weaker retail sales and consumption data, and an increase in benefit claims warrant a sensible' approach to cuts, and not all readings from the US economy indicate 'resilience', while higher wages may go towards rebuilding savings without adding heavily to inflation and higher consumption.
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Open account Try demo Download mobile app Download mobile app12:30 PM GMT - US, CPI inflation y/y. Expected: +3.4% y/y. Previous: 3.4% y/y (0.1% m/m forecast vs. 0.3% previous)
- Core CPI: 3.5% vs. 3.6% previous (0.3% m/m forecast vs. 0.3% previous)
2:30 PM GMT - US, change in oil inventories according to EIA. Expected: -1.5 million Previously: -1.233 million
- Gasoline inventories: 1.5 million vs. 2.1 million previously
- Distillate inventories: 2.14 million vs. 3.19 million
6 PM GMT - US, Fed decision. Expected: 5.5% vs 5.5% previously
6:30 PM GMT - US, Jerome Powell press conference
Central bankers' speeches:
- 8:40 AM GMT - ECB Vujcic
- 1 PM GMT - ECB de Guindos
- 1:45 PM GMT - ECB Mccaull
- 6:30 PM GMT - Fed Powell
- 7 PM GMT- ECB Nagel and Villeroy
- 7:15 PM GMT - BoC Macklem
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