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Ekonomické zprávy
11.11.2021

European session review: USD appreciates as Fed rate hike bets rise after U.S. October CPI data

TimeCountryEventPeriodPrevious valueForecastActual
07:00United KingdomManufacturing Production (MoM) September0.3%0.2%-0.1%
07:00United KingdomIndustrial Production (MoM)September1.0%0.2%-0.4%
07:00United KingdomManufacturing Production (YoY)September4.2%3.1%2.8%
07:00United KingdomBusiness Investment, y/yQuarter III12.9% 0.8%
07:00United KingdomBusiness Investment, q/qQuarter III4.5%2.6%0.4%
07:00United KingdomIndustrial Production (YoY)September4.0%3.1%2.9%
07:00United KingdomTotal Trade BalanceSeptember-1.9 -2.8
07:00United KingdomGDP m/mSeptember0.2%0.4%0.6%
07:00United KingdomGDP, y/yQuarter III23.6%6.8%6.6%
07:00United KingdomGDP, q/qQuarter III5.5%1.5%1.3%
07:00United KingdomGDP, y/ySeptember6.9%5.4%5.3%
09:00EurozoneECB Economic Bulletin    


USD  against other major currencies in the European session on Thursday as hotter-than-anticipated U.S. October CPI data raised expectations that the Federal Reserve would need to be more aggressive with its policy tightening next year.

The U.S. Dollar Index (DXY), measuring the U.S. currency's value relative to a basket of foreign currencies, rose 0.11% to 94.96.

The Labor Department announced yesterday that the U.S. consumer price index (CPI) soared 0.9% m/m in October. This marked the biggest one-month advance in headline CPI since June. Over the last 12 months, the CPI surged 6.2% y/y, recording its largest 12-month increase since November 1990. Economists had forecast the CPI to rise 0.6% m/m and 5.8% y/y in the 12-month period. According to the report, the October increase in all items index was broad-based, with gains in the indexes for energy (+4.8% m/m), shelter (+0.5% m/m), food (+0.9% m/m), used cars and trucks (+2.5% m/m), and new vehicles (+1.4% m/m) among the major contributors. Meanwhile, the core CPI excluding volatile food and fuel costs increased 0.6% m/m and jumped 4.6% in the 12-month period (the most since  August 1991). Economists had expected the core CPI to increase 0.4% m/m and 4.3% y/y last month.

The hotter-than-expected CPI data raised concerns about the prospects for interest rates in the U.S. even though the Fed’s officials indicated they are in no rush to raise rates, reiterating their views that the current spike in inflation is transitory.

According to the CME FedWatch Tool, the probability for a rate hike in June 2022 increased to 68.8% from 58.4% a week ago.

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