US And UK CPI Inflation Reports Draw Traders’ Attention



US and UK inflation reports are always at the forefront of the financial news with this week being no exception. On Tuesday and Wednesday, market analysts will have the opportunity to learn how consumer prices adjusted in the US and the UK in January.

As forecasts regarding monetary policies and rate cuts seem to have differentiated for both economies, these data sets could provide clarity and influence the value of the US dollar and the British pound against their competitors.

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US CPI Inflation January 2024

Are we in for one more dropping inflation report coming from the US? On Tuesday afternoon, the Bureau of Labour Statistics (BLS) is scheduled to release January’s CPI inflation survey. According to some economists, inflation is likely to have dropped to 3.0%, on an annualised basis, in the first month of the year sliding from 3.4% recorded in December.

Month-on-month headline inflation is expected to remain unchanged at 0.2%. Although price levels seem to have a downward trajectory, core inflation remains higher than targeted at 3.9%. Members of the Federal Open Market Committee (FOMC) have expressed their will to scrutinise data as they seem to push back expectations over an early rate cut. 

UK CPI Inflation January 2024

The UK CPI inflation report for the month of January is likely to show a modest pick up to 4.2% from the 4.0% figure recorded in December last year. In its last meeting, the Bank of England (BoE) governing board appeared to be ready to take action if there were indications of consumer prices rising again. Commenting on this, some economists have suggested that although the monetary policy tightening has likely reached its end, rate cuts could be delayed depending on the economy’s status quo.

Swiss CPI Inflation Falls to 1.3% In January

According to a Federal Statistics Office survey, Swiss CPI inflation fell to 1.3% on a year-to-year basis in January, lower than the 1.7% figure expected by analysts. Core CPI also dropped to 1.2% from 1.5% recorded in December.

Economists suggest that the Swiss National Bank (SNB) board should feel comfortable as inflation is lower than the 2% set target. Following the release of the report the Swiss franc lost ground against the euro. Markets price in a rate cut for June while some market analysts suggest that the SNB could consider lowering borrowing costs in March.

New Zealand Inflation Remains High Says RBNZ Governor

The Reserve Bank of New Zealand (RBNZ) Governor Adrian Orr told the Finance and Expenditure Committee that inflation remains high as it came in at 5.3% in the third quarter of 2023 and mentioned that this was the reason the central bank kept borrowing costs on hold. The RBNZ’s deputy Governor, Christian Hawkesby, added that the financial system can cope with such high rate levels.

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This material does not contain and should not be construed as containing investment advice, investment recommendations, an offer of or solicitation for any transactions in financial instruments. Please note that such trading analysis is not a reliable indicator for any current or future performance, as circumstances may change over time. Before making any investment decisions, you should seek advice from independent financial advisors to ensure you understand the risks.



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