US inflation data up next
The Fed's tick list for hikes now focuses on inflation as we get the latest CPI data
So far the checklist probably looks something like this;
- Jobs - big tick
- Wages - little tick - could do better
- Manufacturing - red cross
- Housing - little tick - could do better
- Consumer spending - little tick - could do better
- Ecomomy - medium tick
- Inflation - medium tick
Much like everywhere else headline CPI is running low and today it's not expected to get much better. 0.2% is expected vs 0.2% prior y/y. The big focus is still on the core which strips out all the oil, energy and food nonsense. That's expected to rise 1.9% from 1.8% prior y/y
Any lift in either is going to give the buck a boost and make that check list tick a little bigger, though given what we've seen elsewhere, a jump in prices looks to be the wildcard
USDJPY is pushing up towards an old resistance level at 120.60/70 after finding further dip support at 120.10. The core is the one that matters and if that's confirmed at 1.9% or higher then we could be seeing 121.00 fairly quickly. If it's softer and less that 1.7% then 120.00 could be getting another look.
USDJPY H4 chart
As always the devil will be in the details
Update: Nearly forgot. Keep an eye out for the real weekly average earnings for further signs of wage growth 2.2% exp y/y vs 2.0% prior
