What are the main events for today?

Today is the US CPI Day. Everyone’s waiting for the release so nothing else will matter today. After the CPI release, we will hear from a couple of Fed speakers, including NY Fed President Williams, so that’s going to be something to keep a close eye on.

12:30 GMT/08:30 ET – US September CPI

The US CPI Y/Y is
expected at 2.3% vs. 2.5% prior, while the M/M figure is seen at 0.1% vs. 0.2%
prior. The Core CPI Y/Y is expected at 3.2% vs. 3.2% prior, while the M/M
reading is seen at 0.2% vs. 0.3% prior.

The last US labour
market report came out much better than expected and the market’s pricing for a
50 bps cut in November evaporated quickly. The market is now finally in line
with the Fed’s projection of 50 bps of easing by year-end.

Fed’s Waller
mentioned that they could go faster on rate cuts if the labour market data
worsened, or if the inflation data continued to come in softer than everybody
expected. He also added that a fresh pickup in inflation could also cause the
Fed to pause its cutting.

Yesterday, we got to know from the FOMC Meeting Minutes that Fed Chair Powell basically pushed the committee to go for a 50 bps cut in September.

Given the recent
NFP report and the Minutes, even if the CPI misses, the Fed won’t consider
a 50 bps cut in November anyway despite Fed’s Waller comments. That could be a debate for the December
meeting (doubt though) if inflation data continues to come below expectations.

On the other hand, a hot report will likely keep a 25 bps cut in November on the table, but we could see the market pricing in a pause in December or even less rate cuts for 2025.

12:30 GMT/08:30 ET – US Jobless Claims

The US Jobless
Claims continues to be one of the most important releases to follow every week
as it’s a timelier indicator on the state of the labour market.

Initial Claims
remain inside the 200K-260K range created since 2022, while Continuing Claims
after rising sustainably during the summer improved considerably in the last
weeks.

This week Initial
Claims are expected at 230K vs. 225K prior, while Continuing Claims are seen at 1830K vs. 1826K prior. This time around, all eyes will be on the US CPI report, so nobody is going to care about claims unless we get huge deviations from the expected numbers.

Central bank speakers:

• 07:45 GMT – RBA’s Hunter
• 13:15 GMT/09:15 ET – Fed’s Cook (dove – voter)
• 14:30 GMT/10:30 ET – Fed’s Barkin (neutral – voter)
• 15:00 GMT/11:00 ET – Fed’s Williams (neutral – voter)
• 15:30 GMT/11:30 ET – SNB’s Martin

This article was written by Giuseppe Dellamotta at www.forexlive.com.