EUROPEAN SESSION
In the European session, we don’t have much on the agenda other than the final Italy’s CPI report. The data is not going to change anything for the ECB, so the market reaction will be muted. The price action will likely be mostly rangebound as traders will be waiting for the key US CPI report.
AMERICAN SESSION
In the American session, all eyes will be on the US CPI report. The US CPI Y/Y is expected at 3.4% vs 3.5% prior, while the M/M measure is seen at 0.1% vs -0.4% prior. The Core CPI Y/Y is expected at 2.5% vs 2.6% prior, while the M/M figure is seen at 0.2% vs 0.0% prior. The data will be critical for Fed Chair Warsh’s speech at the Jackson Hole Symposium and for the September rate hike expectations.
The focus will be mainly on the Core CPI M/M measure since a few FOMC members mentioned that the monthly pace in core inflation will be key for their decision. Therefore, this should be one of those rare reports where an in-line figure could still trigger a significant market reaction.
This article was written by Giuseppe Dellamotta at investinglive.com.
