German CPI data headlines the economic calendar in European trading hours. The headline on-year inflation rate is expected to tick down to 1.5 percent, an outcome broadly in line with the average for 2018 thus far. A disappointing outcome echoing recent underperformance relative to forecasts in regional data flow might reinforce an emerging dovish shift in ECB policy bets, hurting the Euro.
Later in the day, the Fed’s favored PCE inflation gauge will cross the wires. That is seen putting the closely-watched core growth rate within a hair of the central bank’s target at 1.9 percent. While a single month’s reading is unlikely to be formative for policy as a whole, a firm result may solidify recent gains made by the US Dollar. Follow-through may be timid before the upcoming FOMC rate decision however.
The greenback returned to the offensive in Asia Pacific trade as Treasury bond yields found their way higher anew. Rates-sensitive commodity bloc FX – the Australian, Canadian and New Zealand Dollars – tellingly underperformed. The three currencies led the way higher against their US counterpart on Friday as it backtracked into the week-end, digesting gains after touching a three-month high.
ASIA PACIFIC TRADING SESSION
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EUROPEAN TRADING SESSION
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