Cpi Data Remains In Focus Ing

Cpi Data Remains In Focus Ing by Andrew Blumer last updated on July 17, 2024

Powell And Cpi Data Remains In Focus

The US Dollar has emerged as a stronger currency since the start of this week, especially after the conclusion of the French elections.

The outcome of the French elections shows no party has won any majority. This has led to save-haven demand, enabling the Gold, JPY, and CHF to rise against the peers. At the same time, the European currencies have turned lower as a sign of save haven demand.

Core Cpi Will Be 0.2% M/M

Against this backdrop, ING analysts believe that this week will be packed with important US macro data, including the CPI report. The core CPI will be around 0.2% m/m, similar to the market forecasts. A reading like this will be enough to keep the hopes of a September rate cut alive.

As of right now, there's a 83% chance that the US Federal Reserve will cut rates at the September meeting by 19 bps.

ING also added that a lot of market players have also increased their expectations for the rate cuts in 2024. Right now, many believe that 50 bps worth of rate cuts will be delivered by the US Fed in 2024.

As for what fuels this analysis by the ING, they cited the weak data from the US jobs market. That's why ING believes that the FOMC will have to cut the rates by a total of 3 times in 2024. Up ahead, the Fed chair Powell will be delivering a testimony where he is expected to adopt a more dovish tone rather than a hawkish one.

Over all, the macro data that's scheduled for this week will maintain a bearish overtone on the US Dollar. However, we consider the political developments in the EU & USA, it means there will not be that many currencies which can benefit from it.

Once the CPI print and the Powell speech is out, the market players will get more clarity on the US Fed monetary policy, DXY, and the bond yields.