US CPI Inflation Report To Take Centre Stage

October 11, 2023 22:12

The US CPI inflation report will be in the spotlight of investors and traders as they expect it to reveal the impact of the Federal Reserve’s (Fed) restrictive monetary policy. The US dollar index was close to a monthly low on Wednesday morning after several Fed board members appeared reluctant to suggest a potential rate hike in November. On Friday, it will be China’s turn to release its CPI inflation data amid concerns over an economic growth slowdown.

International Monetary Fund’s (IMF) analysts wrote in a report that the US economy could grow by 2.1% in 2023 and 1.5% in 2024 with both figures being higher than the IMF forecast published in July. The same report suggested that  the Bank of England (BoE) would need to keep interest rates high into 2024 as the UK tries to combat high inflation figures combined with anaemic economic growth.

US CPI Inflation September Report

The US Bureau of Labour Statistics (BLS) is expected to release the US CPI inflation data for the month of September on Thursday. The report’s figures are expected to shed light on the Fed’s future plans regarding monetary policy tightening as headline and core inflation are important indicators of the economy’s state.

Economists forecast headline inflation to come in at 3.6% on an annualised basis and 0.3%, on a monthly basis, with both numbers being lower than August’s figures. A Financial Times report citing Barclays analysts said that “slight cooling will largely be down to a slower increase in energy prices.” The bank’s economists also noted that “the expected acceleration in the supercore measures of CPI in September, viewed alongside the strong activity data, and still-tight labour market conditions, would suggest that there is more work to be done to sustainably lower inflation towards the 2 per cent target.”

China CPI Inflation September Report

On Friday, the National Bureau of Statistics (NBS) will publish the Chinese September inflation data. Market analysts suggest that headline inflation will come in at 0.2% on a year-to-year basis and 0.3% on a monthly basis. It is no secret that the Chinese economy has struggled to deliver positive, noteworthy results since lifting the coronavirus pandemic measures at the beginning of the year.

Economists at ING suggest that the consumer inflation reading could surpass expectations with a reading of 0.4% as higher oil prices play a role and the government’s economic growth boosting plans seem to be fruitful.

UK GDP August Report

The Office for National Statistics (ONS) is going to release the August GDP report on Thursday. Market analysts expect the GDP growth rate to come in at 0.2% on a month-to-month basis. The UK economy has been struggling in the last few months with inflation hitting multi-decade records while the Banko of England has vowed to control it via tightening its monetary policy.

A report published by the IMF indicated that the UK is set to be the slowest growing member of the G7 next year. The IMF’s latest World Economic Outlook predicts that the UK economy will grow by 0.6% in 2024, 0.4% lower than its previous forecast. That would leave Britain lagging the US, the eurozone area, Japan and Canada. UK GDP is expected to grow by 0.5% this year, a significant slowdown on the 4.1% growth seen in 2022.

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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.

Miltos Skemperis
Miltos Skemperis Financial Content Writer

Miltos Skemperis’ background is in journalism and business management. He has worked as a reporter on various TV news channels and newspapers. Miltos has been working as a financial content writer for the last seven years.