Marketwatch North America

Daily Insights
October 12, 2023

Consumer Prices (CPI) for September were +0.4% month-over-month, higher than the survey estimate of +0.3% but lower than the prior month’s +0.6%. Core CPI (excludes food and energy) was reported +0.3%, in-line with estimates and matching the August result. Year-over-year CPI for September was +3.7%, matching August but higher than the +3.6% estimate. And Core Y/Y CPI for September was 4.1%, matching the estimate and lower than August’s +4.3%.

So, on balance, with M/M and Core Y/Y lower than that reported for August and the Core M/M and Y/Y matching August, one could argue there’s a case supporting the FOMC’s ‘soft landing’ thesis. But the market is reading today’s CPI results as having plateaued over the last three months, and possibly steering the Fed to additional rate hikes.

U.S. Treasury yields surged following release of the inflation data, inverse to Treasury prices which are now lower in all 17 tenors. The biggest price drops are on the near end of the yield curve with the 2-year -0.08%. Fed Funds Futures are implying a 29% probability of a 25-basis-point at the December 13th policy decision.

Higher Treasury yields have fueled flows into the USD, lifting the dollar to gains against all G10 currencies: +0.83% vs. NZD, +0.61% vs. AUD, +0.49% vs. GBP, +0.46% vs. EUR, +0.40% vs. NOK, and lesser gains vs. SEK, JPY, CHF, CAD, and MXN.

Equities are mixed today, and on the commodities front, oil is +1.72% and gold is trading at 1,878.21/oz.

Economic Calendar

USD - Core CPI m/m
AUD - MI Inflation Expectations
USD - CPI m/m
USD - CPI y/y
USD - Unemployment Claims
GBP - GDP m/m
GBP - Construction Output m/m
GBP - Goods Trade Balance
GBP - Index of Services 3m/3m
GBP - Industrial Production m/m
GBP - Manufacturing Production m/m
GBP - BOE Credit Conditions Survey
GBP - MPC Member Pill Speaks
EUR - ECB Monetary Policy Meeting Accounts
GBP - NIESR GDP Estimate
All - IMF Meetings
USD - Natural Gas Storage
USD - Crude Oil Inventories
USD - 30-y Bond Auction
USD - Federal Budget Balance
NZD - BusinessNZ Manufacturing Index
JPY - M2 Money Stock y/y

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 149.483 148.954
eur/usd 0.9459 0.93987
gbp/usd 0.81619 0.81092
aud/usd 1.56902 1.55492
usd/cad 1.3608 1.35782
eur/gbp 0.86425 0.86233
usd/mxn 17.8771 17.7524
Equities and Commodities
S&P 500 4380.99
NASDAQ 15254.4
DOW 33852.2
GOLD 1876.86
SILVER 22.04

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.