ORBEX | Dec 13, 2018 11:02AM ET
Despite expectations of a weaker figure due to the dramatic slump in oil prices over the last two months, US CPI remained broadly unchanged over last month.
The headline CPI reading for November, reflected the weakness in energy markets, registering a decline from the prior month’s 2.5% reading. However, core CPI was actually higher over the month, printing 2.2%, up from 2.1% prior.
While inflation is managing to hold steady for now, the outlook isn’t great as expectations of slower growth both at home and abroad are clouding the horizon. US producer prices data for November, also released this week, rose just 0.1% on the month, down sharply from the prior month’s 0.6%, while the Fed’s main inflation gauge, the PCE index, rose just 1.8%, marking its smallest monthly increase since February.
While news of the planned production cut among OPEC and its allied nations holds the potential to buoy prices next year, there are heavy reservations about whether such cuts can be effectively implemented and whether they will be enough to curb the tide of surging US oil production which has been putting pressure on prices. Further declines in oil will weigh heavily on the inflation outlook for Q1 2019 if they materialize.
The USD Index remains penned in against the 96.91 level resistance which has capped price over the last six months or so. If we can break above here the next level to watch will be the 100-mark, a key psychological and structural level, which also holds the completion of a large symmetry objective. To the downside, the 96.19 level is the first key support zone.
Written By: ORBEX
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.