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The European session was empty in terms of data releases. Everyone is waiting for the US CPI release due in an hour. In the markets, we’ve been seeing some hawkish moves into the CPI with Treasury yields and the USD adding to the prior gains.
There’s clearly some fear that we could get an upside surprise, therefore some hedging into such a key report ahead of the Fed decision in November is what you would expect.
Heading into the release, the market is pricing 43 bps of easing by year end with 20% probability of a pause in November. For 2025 the market sees an additional 90 bps of easing by year end. These expectations are a little more hawkish compared to the latest Fed’s projections.
Below you can find the range of estimates and the distribution of forecasts for the US CPI report:
Range of estimatesDistribution of forecasts
This article was written by Giuseppe Dellamotta at www.forexlive.com.
