US CPI Preview: Fed Remains Worries About Rising Core Prices

Trading Discussion News and Economy
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The all-important US Consumer Price Index for September will be released ahead of the US market open on Thursday.

Expectations are for the headline print to come in at 8.1% YoY, while Core CPI hits 6.5% YoY. The Federal Reserve remains concerned about the potential continued rise in core inflation, and with markets still pricing-in an outside chance of a 50bps at next month’s FOMC Meeting, tomorrow’s data will likely spark volatility across asset classes.

USD/JPY is one such market which could bear the brunt of this spike in volatility as the pair continues its tremendous uptrend fueled by the policy divergence between the Fed and BOJ.

Check out this article for a deeper insight into what to expect from tomorrow’s CPI data, and how it could impact this pair:

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AUD/USD is another pair to watch if CPI comes in hotter-than-expected.

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That’s a great point. Given that the RBA decided to slow their hiking cycle this months we could see the pair come under pressure as a hot US CPI print would open the possibility for an acceleration in the AU and US yield differential.