- EU says too early to give any details on next sanctions package against Russia
- What are analysts saying ahead of the US CPI report later today?
- The devil will be in the details once again when it comes to the US CPI report later
- What is the distribution of forecasts for the US CPI?
- Major currencies muted as traders wait on the US CPI report
- Gun manufacturers' shares rise after the assassination of Charlie Kirk
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- European indices more tentative at the open, investors wait on US inflation data
- China considers aid to local governments to settle unpaid bills - report
- What are the main events for today?
- ECB policy decision coming up later but all eyes are on the US CPI report
- FX option expiries for 11 September 10am New York cut
- BOJ to hold key interest rate at 0.50% in September meeting - poll
It's been a pretty muted session with very limited newsflow and no economic data. Markets traded in tight ranges ahead of the US CPI report although we've seen some slight upside in the US dollar and equities with some downside in gold.
We still have the ECB decision coming up before the US CPI and Jobless Claims data, but it's very likely to be a non-event not only because of the focus on the CPI but also because the central bank is in a hard pause mode.
In the American session, we get the US CPI and Jobless Claims figures. The Core CPI Y/Y is expected at 3.1% vs 3.1% prior, while the Core M/M figure is seen at 0.3% vs 0.3% prior. A soft report will likely raise the probabilities for a 50 bps cut to around 40-60% and then WSJ's Timiraos could "leak" again by how much the Fed is likely to cut.
On the other hand, a hot report won't change anything regarding the 25 bps September cut but could trigger a slightly hawkish repricing for the 2026 pricing (3 rate cuts expected at the moment).
The US Jobless Claims data will be released at the same time of the US CPI, so in case we get big deviations, it might even steal the show. Initial Claims are expected at 235K vs 237K prior, while Continuing Claims are seen at 1951K vs 1940K prior. There's some uneasiness in relation to the actual labour market state given two consecutive soft NFP reports.
The Jobless Claims data is the most timely indicator we have on the labour market and it hasn't been flashing red. Sure, the data continues to show a low hiring and low firing environment but nothing serious, especially if taken together with the positive business surveys.
In case we get strong data coupled with a hot CPI report, the hawkish repricing should be more significant than just a hot CPI and in line claims. Of course, if we get a soft CPI and soft claims, then the dovish bets will likely increase. A soft CPI and strong claims could still see the probabilities of a 50 bps cut increase but it should remain roughly the same further down the curve.
