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Goldman Sachs discusses the USD outlook around tomorrow's US CPI print for the month of January.
- "Our economists have argued that inflation readings might be stronger at the start of the year because a disproportionate number of prices are reset at the start of the year, and firms might set contract rates higher than usual in the current environment. If it occurs, we would not discount this as a "normal" seasonal distortion, because it would demonstrate the mechanism that could lead to a more prolonged overshoot of the Fed's inflation aim," GS notes.
- "In short, this week's inflation data have the potential to interrupt the more relaxed inflation outlook that has gripped markets in recent months, especially as our latest work suggests that market responses to data surprises are becoming somewhat more symmetric. However, if the January inflation data fail to "rise to the occasion," then the macro backdrop could continue to push towards Dollar depreciation," GS adds.
This snapshot from the ForexLive economic data calendar, access it here.
The times in the left-most column are GMT.
The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected.
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In case you haven't seen this, a scenario analysis from JPMorgan. What JPMorgan thinks could happen to the market tomorrow after CPI
- CPI below 6% - S&P 500 moves up by 2.5%-3%
- CPI 6.0%-6.3% - S&P 500 moves up by 1.5%-2%
- CPI 6.4%-6.5% - S&P 500 moves down by 0.75%-1.5%
- CPI above 6.5% - S&P 500 moves down by 2.5%-3%