All Eyes on Today’s US CPI Data

Pressure on central banks

Data from Germany released earlier on Thursday revealed that consumer inflation in the largest economy in the Eurozone increased by 10.0% annually in September, up 1.9% from the previous month, putting more pressure on the European Central Bank to keep tightening monetary policy.

In a separate announcement, the Bank of England said it would stop its emergency bond-buying program on Friday. Gilt yields are at their highest level in two decades, and the incoming British Prime Minister Liz Truss is “absolutely” committed to sticking to her spending plans, so the central bank could be compelled to back down.

As investors prepared for further hawkish signals from the Federal Reserve, the dollar index traded steady, remaining at a 20-year high. The central bank’s officials unanimously decided to further monetary tightening, according to minutes from its September meeting released on Wednesday.

Inflation continues to rise

The US PPI inflation increased more than anticipated in September, as per data released on Wednesday, predicting an increase in the CPI as well.

As it tries to rein in the nation’s out-of-control inflation, the Fed also plans to maintain high-interest rates for longer than previously anticipated. The US CPI inflation rate stayed above 8% in September, keeping near to a 40-year peak reached earlier in 2022, according to data that are anticipated later today.