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CPI Provides the Last Look Ahead of Weds Fed

  • Currency markets generally trade inside their recent ranges early Tuesday, with the EUR/USD rate oscillating either side of 1.0550. Similarly, GBP/USD sits inside the week's range so far, with markets awaiting cues from the BoE, ECB and Fed later this week.
  • On an intraday basis, there remains minor strength in commodity-tied currencies, putting the likes of AUD, NZD and NOK toward the top-end of the G10 pile as equities extend their recovery off the Monday low. The e-mini S&P remains around 80 points higher on the week, with a late rally into the Monday close largely responsible for the jump.
  • Similarly, crude prices have worked their way higher, as concerns around an extended delay to flow through the Keystone Pipeline continue to circulate. This has kept NOK underpinned, with the EUR/NOK rate back below 10.50 ahead of Thursday's Norges Bank decision.
  • Focus turns to the November CPI release due later today, with markets expecting a significant step lower to 7.3% and 6.1% for the headline and core Y/Y measures (down from 7.7% and 6.3% respectively).
  • The release will be the final look for the FOMC ahead of Wednesday's FOMC rate decision, at which markets continue to expect the board to opt for a slower pace of tightening at 50bps.
MNI London Bureau | +44 203-865-3809 |
MNI London Bureau | +44 203-865-3809 |

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