Enter your emailNervous markets await today’s all-important US CPI data release, which will be the key influence upon the Federal Reserve’s monetary policy.Market focus has turned to today’s scheduled release of US CPI data. Expectations have become more pessimistic after yesterday’s release of higher-than-expected US PPI data
which is usually strongly correlated with inflation. PPI was expected to rise by 0.2% month by month but in fact rose by 0.4%, and CPI is also expected to show a monthly increase of 0.2%. If CPI increases by more than 0.2%, it will likely trigger a selloff in stocks and boost the US Dollar and treasury yields.
The minutes of the most recent FOMC meeting were released yesterday. They showed that members raised their assessment of the path of rate hikes which will be required and emphasized the importance of prioritizing the fight against inflationBritish GDP data released yesterday showed a surprise month-on-month contraction of 0.3% when the rate has been expected to be unchanged.
The last time the price of this currency pair got near ¥146 the Bank of Japan successfully intervened to drive the price considerably lower, but it has been steadily trending higher ever since, suggesting the Bank will find it difficult to permanently suppress the price if it wishes to. The Bank may begin to intervene practically at any moment.