US Inflation data set to move the markets

GBP

Bank of England Monetary Policy Committee member Silvana Tenreyro is speaking today. She usually is dovish in her pronouncements and voted against a rate increase last Thursday.

After last week’s reaction to the Bank of England putting the proposed rate hike on hold, we could be in for a nervy day for Sterling watchers. Sterling may also come under renewed pressure as the disagreements over the implementation of the Brexit agreement seem to be worsening, and Article 16 being triggered is becoming an increasingly likely outcome.

EUR

Germany released its inflation data this morning, which was in line with the market consensus with an annual rise of 4.6%. These numbers are unlikely to shake the European Central Bank’s view that inflation is transitory nor their reluctance to tighten policy.

No doubt later, the uber hawkish Dr Jens Weidmann, retiring president of the Bundesbank, will give a contrasting view of events when he speaks. The ECB’s Frank Elderson is also slated to speak this afternoon.

USD

The dollar has continued to trade sideways, but with many traders taking advantage of tomorrow’s Veterans Day holiday to have a long weekend, today’s data should impact the market. We will be watching the release of the latest inflation data, the Consumer Price Index, closely this afternoon, especially after China’s factory-gate inflation was reported at a 26-year high this morning. The weekly jobless total will also be released.

The dollar should continue to find fans, but some traders are becoming mindful that Jerome Powell’s tenure as Chairman of the Federal Reserve looks like it is drawing to a close and with Lael Brainard in the wings, he may start to adopt a more cautious approach.