**As seen in Risk In The Week report 11/10/23, subscribe at cablefxm.co.uk/reports
U.S. September consumer prices rose 3.7% Y/y, this was above the consensus median of 3.6%. The monthly reading topped the survey at 0.4%, the forecast ranged from 0.2% to 0.6%. The core metric rose by 4.1% Y/y, in line with economists' estimates, the September reading was the softest pace in two years. On the month, the super core inflation gauge rose by 0.61%, the biggest monthly gain in a year. Housing prices contributed with more than half of the overall increase in September, the owners equivalent rent component rose 0.42% M/m, the fastest pace since February.
The headline was largely supported by a rise in gasoline prices which are seen reversing during October, however, the stickiness in the core CPI came to reinforce the 'higher for longer' case. October consumer prices data might settle an ongoing debate on whether the Fed is restrictive enough, there are no further rate increases priced in by swaps. The desk at Commerzbank noted that October prices are likely to show a small rise of 0.1% M/m, and that this is solely due to a 5% monthly drop in gasoline prices. For the core rate, Commerzbank flags upside risks, noting the print could tick at 0.4%. Lastly, they do not see inflation falling back to 2% but stabilizing at around 3%.
Comments