- Analytics
- News and Tools
- Market News
- US CPI Preview: Almost impossible to predict the short-term reaction of the USD – Commerzbank
US CPI Preview: Almost impossible to predict the short-term reaction of the USD – Commerzbank
The highlight of the week, the US inflation figures for December, is finally on the agenda today. Economists at Commerzbank analyze USD outlook ahead of the Consumer Price Index (CPI) report.
The second decimal point could become important for the USD in the medium-term
The economists surveyed by Bloomberg expect the headline rate to rise stronger again month-on-month compared to last month (to 0.2%) and the MoM change of the core rate at least not to fall further (still +0.3%). However, the consensus for the latter was still at 0.2% on Wednesday morning. Our economists take a similarly narrow view of the data, expecting +0.25% in each case. Nuances will likely determine the rounding. This makes it almost impossible to predict the (short-term) reaction of the USD. Accordingly, I will refrain from doing so at this point.
As long as core inflation continues to stabilise at a level between 0.2% and 0.3% MoM, it is still a tad too high. Probably not high enough to justify the current level of interest rates forever, but also too high to justify more than 150 bps of rate cuts this year. And this is where the second decimal point is likely to become relevant again in the medium-term.
For stronger rate cuts and, above all, an even stronger turnaround on the part of Fed officials, we would probably need to see figures that are a little bit below 0.2% MoM. Although this is not expected today, the second decimal point could become important for the USD in the medium-term.
© 2000-2024. All rights reserved.
This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).
The information on this website is for informational purposes only and does not constitute any investment advice.
The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.
Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.
Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.
Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.
Bank transfers
