Inflation

155 has become the latest 'glass ceiling' for the rapid rise of USD/JPY. And with a key US inflation report, BOJ meeting and potential for risk-off sentiment next week, this key level could be tested and prompt a response from Japan's central authorities.

With traders keen to see who will be the first among the BOE, BOC or RBNZ to cut rates, their attention will be surely on next week's inflation reports for their respective regions.

The biggest economic data release of this week, and arguably the whole month – US CPI – didn’t disappoint in terms of its market impact.

Bond markets make the financial markets go round, so when they provide a strong signal on how Wednesday’s US consumer price inflation report may be interpreted, every trader should sit up and take notice.

Long bond bulls will not like the message coming from the recent price action in the TLT ETF, warning of the potential for higher yields and increased capital losses. With little technical support below where it currently sits, it places even more importance on the Fed chooses to signal this week.

GBP/USD remains in a bullish technical position ahead of the US CPI report - see what we're watching!

Traders are pricing in a small, but non-zero, chance of a Fed rate hike in 2024. Those odds could grow with a couple more hotter-than-expected inflation reports.

Gold is carrying short-term bullish momentum into the coming week, with potential for a move up toward the 2024 highs in the $2060 area.

The dollar’s strength and opportunity cost of holding gold are outweighing its inflation hedge credentials

Interestingly, the year-over-year reading on US CPI is expected to rise for only the third time since mid-2022, but the increase is expected primarily due to so-called “base effects"...

Given the quiet economic calendar, EUR/USD may consolidate with a slight bullish bias over the next couple of days ahead US CPI and PPI.

The US Dollar Index's failed breakout and sharp bearish reversal suggests that a near-term top may be in and the path of least resistance will be to the downside in the coming week.

With a favourable macro backdrop and technical indications pointing higher, see why we could see new records in gold prices in 2024.

Traders and economists expect the CPI report to show that consumer prices rose 0.0% m/m (3.1% y/y), with “Core” CPI expected at 0.3% m/m (4.0% y/y).

With inflation data for Europe and the US in today's European session, we take a look at EUR/USD to identify key levels and a directional bias.

Once again, the 1-day implied volatility levels for EUR/USD and USD/JPY have blown out ahead of a busy calendar. Central bank members from the Fed, ECB, BOE and SNB will hit the wires, European GDP is also on tap ahead of the key US inflation report.

With the decline in the inflation rate seemingly stalling, a higher-than-expected inflation reading is likely to be more impactful to markets.