July US Inflation Report Overview:
- The July US inflation report (consumer price index) is due out on Tuesday, August 13 at 12:30 GMT, and the data are expected to show stability in price pressures.
- With Fed policymakers reacting directly to movements in the US-China trade war, there is little reason to believe that the inflation data will have too much impact on prices.
- Retail traders have remained net-long since May 3 when USDJPY[2] traded near 111.98; price has moved 5.7% lower since then.[1]
Join me on Mondays at 7:30 EDT/11:30 GMT for the FX Week Ahead webinar, where we discuss top event risk over the coming days and strategies for trading FX markets around the events listed below.[3]
08/13 TUESDAY | 12:30 GMT | USD Consumer Price Index (JUL)
The July US inflation report (consumer price index) due on Tuesday is due to show another small rebound in price pressures, but nothing that should motivate the Federal Reserve to alter its current aggressively dovish policy path in any significant manner.
According to Bloomberg News, headline CPI is expected in at 1.7% from 1.6%, and core CPI is due in at 2.1% unchanged (y/y). As global growth concerns have picked up in recent months, price pressures have dropped thank in part to a downswing in crude oil prices. However, stability in July may be catering to relatively stable inflation as well (though this should change come the August report).
Crude Oil Price versus US 5y5y Inflation Swap Forward (August 2018 to August 2019) (Chart 1)
Crude oil prices[4] only fell by -0.5% during July, and in turn,
