US and UK inflation data in focus this week

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US and UK inflation data in focus this week

The economic calendar for this week is packed with crucial data, with markets keenly awaiting inflation figures from the United States and the United Kingdom, alongside a host of other significant releases that could sway monetary policies and market dynamics.

In the United States, inflation has been a central concern for policymakers and investors alike. The year-on-year inflation rate remained unchanged at 3.7% through September, while the core measure, which excludes volatile food and energy prices, eased to 4.1%. Forecasts for October suggest a further cooling of inflation to 3.3%, with the core measure expected to dip to 4.0%. Comments from Federal Reserve Chair Jerome Powell regarding possible policy tightening have already impacted the US dollar , bond yields, and major equity indices. The upcoming inflation data is particularly critical; deviations from expectations might trigger a shift in rate hike forecasts.

The UK is also set to release its Consumer Price Index (CPI) inflation data. Analysts predict a deceleration in the year-on-year inflation rate to 4.8% in October, down from 6.7% in September, largely due to base effects from utility prices. Similarly, core inflation is projected to slow from September's 6.1% to 5.8%. These figures come after the Bank of England's decision to hold the Bank Rate steady at 5.25%, marking the second consecutive meeting without a rate change.

Beyond these key inflation reports, the week is filled with additional tier-1 data releases that are expected to influence markets across different regions:

  • The UK will provide insights into its labor market with employment and wages data.
  • Germany's ZEW Economic Sentiment Index will offer a glimpse into the economic outlook within European markets.
  • Australia's Wage Price Index could have implications for the US dollar and bond yields.
  • Inflation will remain a topic with the release of US Producer Price Index (PPI) data.
  • US Retail Sales figures are on tap, providing a snapshot of consumer spending.
  • The New York Empire State Manufacturing Index will reflect manufacturing conditions in the United States.
  • Australia's Employment Data will shed light on job market health down under.
  • China's Industrial Production and Retail Sales reports are set to affect global markets.
  • The United States will also disclose its Weekly Unemployment Claims, Philadelphia Fed Manufacturing Index, and Industrial Production Data, painting a broader picture of the American economy's health.

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