Yearly headline CPI for October was 2.6% (2.6% est.), slightly above September’s 2.4% reading. YoY Core CPI was unchanged from the previous period and matched the 3.3% estimate. Monthly headline CPI (0.2%) and core CPI (0.3%) matched both estimates and the previous month’s results.
Evidence of steady inflation at the consumer level leaves the door open for a rate cut at the FOMC’s December 18 policy meeting, its final rate policy decision of the year. The implied probability of a 25bps cut is now 82.3%, up from only 58.7% yesterday. U.S. Treasury yields are lower in all tenors today following the inflation data, led by a 0.086% decline in the 2-year. The decline in longer-term yields is more moderate with the 10-year -0.049% at 4.378%, near the mid of its 7-day range.
The dollar is higher vs. all G10 pairings, reversing losses against the G10 prior to the CPI data. The U.S. Dollar Index is -0.05% at 105.97 after setting a fresh 6-month high at 106.205 earlier in the session.
USDJPY reached an intraday high at 155.23, its highest since July, and extending the dollar’s uptrend begun mid-September, +11.02% over that period
Gold is +0.48% today at $2,609.19/oz but is -4.89% since the election a week ago. Appetite for risk assets was unleashed following Trump’s successful bid for the White House, seen as ushering in an era of business-friendly policy. The S&P 500 is +3.53% over the same post-election period and Bitcoin is +32.5%.
Tomorrow’s economic calendar includes PPI (producer inflation) and weekly jobless claims.
