UK inflation data for September in focus today
Stimulus hopes continue to linger as once again, talks get pushed back and the carrot on the stick is still ever present in front of the market's eyes. Although some of the optimism was dimmed in late trading yesterday, the market is feeling cheery again today.
The bond market is also seeing a notable move as 10-year Treasury yields are hinting at a breakout currently, up by over 4 bps to 0.829%. Is the reflation trade back on?
US futures are keeping higher as well and that is feeding into a more 'risk-on' feel ahead of European trading with the dollar slumping across the board.
Of note, EUR/USD is trading at a one-month high close to 1.1850 after a break of the 9 October high @ 1.1831 earlier. Adding to that is GBP/USD managing to move back above its 200-hour moving average - a level that limited gains yesterday - to close in on 1.3000.
Elsewhere, AUD/USD and NZD/USD are also up by ~0.5% and pushing above their respective 100-hour moving averages as buyers wrestle back some near-term control.
In short, the dollar is being stretched technically once again but this time sellers are looking more poised to try chase a firmer move than what we have seen since last week.
Economic data releases won't do much to shake things up but UK CPI data may feed into come considerations for the pound if it misses to the downside later on.
Otherwise, the focus will stay on the risk mood and stimulus hopes for the most part as the dance continues, with Brexit and the virus situation also at play.
0600 GMT - UK September CPI figures
0600 GMT - UK September PPI figures
Prior release can be found here. Consumer inflation is expected to show some improvement last month, picking up slightly after the end of the UK's 'eat out to help out' scheme last month. But amid any downside miss, that will certainly put some added pressure on the BOE that price pressures are keeping more subdued and possibly more policy action may be called upon sooner rather than later.
0600 GMT - UK September public finances data
Prior release can be found here. A general indication of debt taken up by the UK in the battle against the virus crisis. A minor data point.
1100 GMT - US MBA mortgage applications w.e. 16 October
Weekly US housing data, measures the change in number of applications for mortgages backed by the MBA during the week. The focus will once again be on purchases as that has been one of the more bullish spots outlining that US economic conditions are not as dire as first suggested by the recent dip due to the coronavirus impact.
That's all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.
