Inflation is going nowhere fast: core CPI slides from 2.3% to 2.2% year over year, worse than expected. On a monthly basis, core prices are up 0.1% and not 0.2% that was projected. Headline inflation came in bang on expectations: 0.3% m/m and 1.5% y/y.
The US dollar is slightly lower in the immediate aftermath. EUR/USD makes an attempt to top 1.10, GBP/USD extends its gains following the high UK inflation numbers and USD/JPY is trying to lift its head around 104.
The United States was expected to report a monthly rise of 0.3% in the Consumer Price Index (CPI) in September, higher than 0.2% in August. Core CPI was expected to rise 0.2% after 0.3% beforehand. On a yearly basis, prices carried expectations for a rise of 1.5%, much higher than 1.1% seen last time, with core prices rising 2.3%, exactly as the previous month.
The US dollar took a breather in its domination ahead of the publication.
Slow moving inflation is one of the core reasons for the Fed to move slowly on rates. The effect of falling oil prices is now diminishing, yet the FED mostly cares about core inflation.
More: EUR: How to Trade A ‘Quite Dovish’ Draghi This Week? – BofA Merrill
