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Dollar retreats as US inflation slows

Underlying consumer price growth decelerated in the United States last month, clearing the way for a second consecutive rate cut from the Federal Reserve at next week’s meeting, and putting downward pressure on the dollar. According to delayed data published by the Bureau of Labor Statistics this morning, the core consumer price index—with highly-volatile food and energy prices excluded—rose 0.2 percent in September, accelerating slightly from August’s 0.3-percent increase, and rising 3.0 percent on a year-over-year basis. This undershot consensus estimates among economists polled by the major data providers ahead of the release, and was the slowest pace recorded in...

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Traders brace for US inflation print, Canadian dollar shrugs off Trump trade threats

Currency markets are trading with a slight risk-off flavour as investors await the release of the delayed September inflation report later this morning. Economists expect headline inflation to accelerate slightly on a year-over-year basis, while the less-volatile core measure holds steady, but there is considerable uncertainty around the extent to which tariff-led price increases have translated into upward pressure on goods costs. The dollar is edging higher against a basket of its major peers, ten-year Treasury yields are holding just below the 4 percent threshold, and equity futures are pointing to a stronger open after a series of relatively-positive earnings...

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US CPI in focus

• Mixed signals. Sanctions on Russian producers boosted oil prices. Limited spillover into other markets. Equities rose. AUD outperformed overnight.• US inflation. US CPI due tonight. US government shutdown delayed it. Diverging ‘goods’ & ‘services’ price trends at play. Data may generate USD vol. Global Trends Geopolitical developments generated a little volatility across a few markets overnight, though risk assets are generally firmer. US sanctions on some of Russia’s largest oil producers due to the lack of commitment to end the Ukraine war saw oil prices rise ~5%. That said, at ~$66/brl brent crude is still tracking below its 1-year...

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Swings & roundabouts

• Push-pull. Pockets of vol. in some asset classes. US equities eased, bond yields consolidated & USD tread water. AUD & NZD held steady.• US CPI. US Gov. shutdown ongoing. But US CPI will be released Friday night. Diverging trends between ‘goods’ & ‘services’ prices. USD vol. likely.• AU macro. RBA Gov. Bullock speaks tomorrow. Q3 CPI due next week. Firmer inflation pressures may temper enthusiasm about RBA rate cuts. Global Trends There were pockets of volatility across some asset classes overnight on the back of some news headlines. But on net the moves were rather modest. Reports the Trump...

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Momentum trades fade as nerves jangle across markets

With the US government shutdown dragging into a 22nd day, statistical agencies and the Federal Reserve under communications blackouts, and the precious metals complex melting down, the dollar is trading sideways against a basket of its peers this morning. Punters in prediction markets are betting that the government will remain closed until mid November, and the political tea leaves aren’t looking promising. In contrast with prior episodes, polls are showing that voters think both Republicans and Democrats share the blame for failing to find a funding solution, and the president’s approval ratings are holding firm, suggesting that the forces that...

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