Markets advance as focus falls on US CPI
|Asian shares advanced on Thursday following the moderately positive performance from Wall Street overnight as dovish Fed minutes and easing oil prices supported risk sentiment. However, markets remain cautious amid mounting geopolitical tensions in the Middle East and incoming US data. European markets opened higher ahead of the ECB meeting minutes while US futures are flashing green as the focus falls on the U.S. consumer inflation report later today. In the currency space, dollar weakness has been a theme this week amid growing expectations around US rates peaking. Looking at commodities, oil prices fell for a third day after industry data revealed a larger-than-expected rise in crude inventories, while gold continued its rebound as the USD and Treasury yields retreated.
Dollar steady ahead of US Inflation data
The September US Consumer Price Index (CPI) report is likely to influence expectations around whether the Fed will keep rates higher for longer.
Headline inflation is expected to cool to 0.3% month-on-month from 0.6% seen in the prior month while the core is projected to remain unchanged at 0.3%. Should September’s CPI report show evidence of cooling prices, this is likely to boost bets around the Fed pausing hikes for the rest of 2023 and weaken the dollar further. As of writing, traders are currently pricing in a 10% probability of a 25-basis point hike in November, with this rising to 30% by December, according to Fed Funds futures. A sticky inflation print may halt the decline in the dollar and see it resume its uptrend.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.