FOREX was little changed on Thursday, both before and after the CPI inflation figures.
The ‘$-Index remains perfectly stable at 102.95 and variations remain symbolic, despite US rates continuing to tighten (the ’10-yr’ is up +5pts this evening, above 4.1200%, whereas it was trading at around 3.7300% last Wednesday: it is back at its July 30 levels, i.e. 4.1300%).
The Euro is slipping -0.15% towards 1.0920, as is the Pound… on the other hand, the Swiss Franc is the strongest currency on Thursday, gaining +0.45% against the $ (0.5860) and +0.6% against the Euro.
September’s CPI leaves traders unmoved: the US consumer price index calculated by the Labor Department rose by 2.4% in September 2024 compared with the same month in 2023.
Admittedly, this is the lowest rate since February 2021, but it exceeds Jefferies’ estimate by 0.1% points.
And it’s no better in ‘core’ terms (excluding energy at -6.8% and food at +2.3%), since the annual inflation rate came out at 3.3% last month, a level also 0.1 points higher than Jefferies’ forecast.
On a sequential basis, i.e. between August and September 2024, US consumer prices rose by a further 0.2% unadjusted, and by 0.3% excluding energy and food.
In addition, the Labor Department announced that 258,000 new jobless claims were registered in the US in the week to September 30: this figure, which was 33,000 higher than the previous week, came as a surprise.
On Thursday, Raphael Bostic (head of the Atlanta FED) stated that the FED should skip its turn to cut rates at one of its next 2 FOMC meetings (November 6/6, December 17/18).
The ‘minutes’ published on Wednesday evening emphasize that the decision to reduce the cost of money by 50 basis points was taken to support economic growth and prevent a further deterioration in employment”, explains Quasar Elizundia, at Pepperstone.
In view of last Friday’s US employment figures, is such support necessary? The answer seems to be no.
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