Closer to the end of the trading week, January’s American CPI figures made a real sensation. Well, leading survey data provides rather a positive picture of price growth trends. Then, service-sector inflation managed to strengthen for a fourth month. Additionally, manufacturing sector output prices went up at the fastest tempo since August 2015.
All of this illustrated above may result in a growing year-on-year inflation rate, in spite of the fact analysts expected it to stay unchanged from the previous result of 2.1%. The given result can hardly get along with the step reassuring turn in Fed’s policy bets since the beginning of this year. To add to this, Fed Funds futures have just dropped a distinct hint that it makes no sense to wait for rate rises in the next year.
Meanwhile, data, which suggests otherwise, will most probably power the evergreen buck against its key rivals. Additionally, the returning probability of near-term stimulus withdrawal might undermine risk appetite, thus brining commodity-bloc FX lower along with share prices, simultaneously driving funding currencies.
By the way, comments from the final day of the European leaders’ summit might provoke a response as for asset prices.