Forex Signals Brief December 12: Core US CPI to Remain Unchanged at 4.0% in November
Yesterday the price action in most financial assets was slow as traders were waiting for the big events to start coming out today, while yesterday was devoid of any significant economic data. However, we saw the US employment trends fall to 113.05 points, which was another negative sign for US employment.
The price action in the Forex market revolved mostly around the JPY after a report that put to rest hopes that the Bank of Japan was about to raise interest rates as the BOJ governor Ueda hinted last week. This contributed to the JPY falling rapidly around 100 pips against all major currencies.
The USD was grinding higher slowly, following Friday’s positive price action after a strong NFP report, albeit slowly. Gold continued lower, losing around $30 once again, as it fell to $1,976, so it is looking increasingly like the new record high was just a fakeout.
Today’s Market Expectations
Today starts with the employment report from the UK, with the consensus for the net employment at 20.3K and the headline earnings growth in the three months to October anticipated to decrease to 7.7% from 7.9% previously, with the ex-bonus figure falling to 7.4% from 7.7%. The unemployment rate is expected to remain stable at 4.2% once again, albeit vacancies have continued to fall, and PAYE payroll growth has halted.
The US inflation is the highlight of the day which comes a day before the FOMC policy statement, with the headline CPI predicted to grow +0.1% year on year from 0.0%. Core CPI is expected to rise +0.2% month on month, matching the October increase. The December meeting is set in stone, but the numbers may influence expectations for future FED policy easing, with market projections calling for 100-125bps of rate decreases in 2024.
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