The GBPUSD is the strongest and the NZD is weakest as the North American session begins. The US CPI data will be released at 8:30 AM. The expectations are for the MoM to rise by 0.5% versus 0.1% last month (previously revised from -0.1%). The core levels expected to rise by 0.4% which is the same as last month's rise (revised from 0.3% pre the report last Friday). The YoY headline is expected to dip to 6.2% from 6.5% last month. The core measures expected to fall to 5.5% from 5.7%.
A year ago the headline inflation rise was 0.8% while the core was 0.6% MoM. Those are dropping out in the YoY calculation this month leading to the falling YoY level, but those high months are the time for big dips. With the headline data this month expected at 0.5% and 0.4%, they still are too high on a month on month basis to bring inflation down to the desired 2% Fed target.
Traders will be sifting through the data for service inflation. Fed officials have been talking about service inflation less shelter and its trend for clues to lower rates.
The USD is lower in the morning snapshot ahead of the report. US stocks are marginally higher after gains yesterday. The USD is lower as well.
In other overnight news, the BOJ made it official that Kazuo Ueda would be the nominee for the next center by Gov. replacing Haruhiko Kuroda. Crude oil is lower as the US government plans to release more from its strategic petroleum reserves. The US is releasing a 26 million barrels. Last year they released a record 180 million barrels. The news came as somewhat of a surprise.
A snapshot of other markets is showing:
- Spot gold is trading at $4.34 or 0.23% at $1857.72.
- Spot silver is down $0.18 or -0.86% at $21.79.
- WTI crude oil futures are down $1.21 or -1.51% at $78.93
- Bitcoin is trading at $21,836 in narrow trading. The high price reached $21,885. The low price was at $21,691.
In the premarket for US stocks, the major indices are marginally after yesterday's trading saw the major indices up rise by at least 1.1% with the NASDAQ leading the way with a gain of 1.48%:
- Dow Industrial Average is up 41 points after yesterday's 376.66 point rise
- S&P index is up 10 points after yesterday's 46.85 point rise
NASDAQ index is up 42 points after yesterday's 173.67 point rise
In the European equity markets, the major indices are also trading higher:
- German DAX +0.4%
- France's CAC +0.45%
- UK's FTSE 100 +0.3%
- Spain's Ibex +0.54%
in the US debt market, yields are lower across the board:
In the European debt market, the benchmark 10 year yields are mixed.
