• Expects inflation to moderate in France
• Expects French unemployment rate to go up to around 8% before falling back

He is speaking somewhat in his capacity as Bank of France governor here. And the remarks aren't anything that stand out. As things stand, traders have fully priced in a rate cut for December. The odds of a 25 bps move are at ~68% with the remainder tied to a 50 bps rate cut.

Welcome to the US CPI Day! Inflation is back at the top of market's focus after the Fed's 50 bps cut in September, the acceleration in the US data and Trump's victory.

If we look at the markets, there's been already some pre-positioning/hedging into a potentially higher than expected CPI print, so there's some risk of a "sell the fact" reaction. Of course, a bigger than expected upside surprise would be much more straightforward.

The market is currently pricing a 63% chance of a 25 bps cut in December and basically two more 25 bps rate cuts in 2025 which is already much less than the four projected by the Fed in September.

13:30 GMT/08:30 ET - US October CPI

The US CPI Y/Y is expected at 2.6% vs. 2.4% prior, while the M/M measure is seen at 0.2% vs. 0.2% prior. The Core CPI Y/Y is expected at 3.3% vs. 3.3% prior, while the M/M figure is seen at 0.3% vs. 0.3% prior.

At the latest Fed’s decision, Fed Chair Powell said that they expect bumps on inflation and that one or two bad data months on inflation won’t change the process. This keeps the 25 bps cut in December in place even if we get higher inflation readings.

The market though is forward-looking, and the rise in Treasury yields showed that the market sees risks to the inflation outlook. Moreover, the red sweep could increase those fears if the progress on inflation stalls, or worse, reverses.

Therefore, higher inflation readings might not change the near-term monetary policy outlook, but I personally see it changing the market’s outlook and eventually the Fed’s one.

Central bank speakers:

• 09:45 GMT - BoE's Mann (hawk - voter)
• 14:35 GMT/09:35 ET - Fed's Logan (neutral - non voter)
• 18:00 GMT/13:00 ET - Fed's Musalem (neutral - non voter)
• 18:30 GMT/13:30 ET - Fed's Schmid (hawk - non voter)

Fundamental Overview

The puzzling weakness in the US Dollar following Trump’s victory looks more and more like it was just a “sell the fact” reaction. The greenback is now back in the driving seat, and we might have also seen some pre-positioning in the past couple of days into a potentially hot US CPI report today.

At the latest Fed’s decision, Fed Chair Powell said that they expect bumps on inflation and that one or two bad data months on inflation won’t change the process. This keeps the 25 bps cut in December in place even if we get higher inflation readings.

The market though is forward-looking, and the rise in Treasury yields showed that the market sees risks to the inflation outlook. Moreover, the red sweep could increase those fears if the progress on inflation stalls, or worse, reverses.

The market might have already assigned some premium to a higher than expected print, so there's some risk of a short-term "sell the fact" reaction on a higher than expected number.

It goes without saying that a bigger than expected upside surprise should see the momentum increasing immediately with the US Dollar likely rallying across the board and Treasury yields shooting higher.

On the other hand, a soft print will likely see the US Dollar and Treasury yields falling, although one can argue that it's just going to provide a pullback to go long the US Dollar and short bonds again at even better levels as future conditions will likely see inflation getting stuck above the target or even moving back higher.

EURUSD Technical Analysis – Daily Timeframe

On the daily chart, we can see that EURUSD broke through the key support zone around the 1.0777 following the Trump’s victor, retested it and eventually continued lower. We are now testing another key level at 1.06 handle, and this is where the buyers are stepping in with a defined risk below the level to position for a rally back into the 1.0777 level. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 1.05 handle next.

EURUSD Technical Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we have a downward trendline defining the current bearish momentum. We can expect the sellers to lean on it to position for the break below the 1.06 handle, while the buyers will look for a break higher to increase the bullish bets into the 1.0777 level.

EURUSD Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we have a minor resistance zone around the 1.0630 level where we have the trendline for confluence. This is where the sellers are likely to step in with a defined risk above the trendline to position for the break below the 1.06 handle. The buyers, on the other hand, will look for a break higher to increase the bullish bets into the 1.0777 level. The red lines define the average daily range for today.

Upcoming Catalysts

Today, we have the US CPI report. Tomorrow, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US Retail Sales data.

• Headline CPI reading not telling us that underlying inflation dynamics have been vanquished
• Services inflation is pretty sticky
• Energy prices are more likely to go up than down
• Sees more volatility and upward bias to some inflation drivers

Do keep in mind that Mann is arguably the most hawkish member among the BOE policy committee. So, her comments here are not as striking as they might seem to be.

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For some context, these subsidies did come to an end in May but were reinstated in August through to October to cope with the warmer weather. Subsequently, they were continued until this year-end but the funds had to be drawn from reserves in the budget for the fiscal year that started in April.

NHK is now reporting that the government is considering keeping these subsidies from January through to March next year. Amid a higher cost of living in key populated areas such as Tokyo, the measure above is mainly to try and combat rising consumer prices.

WASHINGTON, D.C. – Given broadcasters' integral role in educating the public on COVID-19 and vaccine deployment, the National Association of Broadcasters (NAB) has joined the COVID Collaborative, a national assembly of experts and organizations working on unified action against the COVID-19 pandemic. NAB President and CEO Gordon Smith will serve on the Collaborative’s National Advisory Council.

WASHINGTON, D.C. – In response to today's violence at the U.S. Capitol Building, the following statement can be attributed to NAB President and CEO Gordon Smith:

Washington, D.C. – The National Association of Broadcasters (NAB), the Donald W. Reynolds Journalism Institute (RJI) and the National Association of Chain Drug Stores (NACDS) today announced the launch of an online toolkit to help local journalists craft COVID-19 vaccine education messages that best resonate with their audiences. The toolkit is designed to provide journalists with information and resources to create news reports, public service announcements and other messages related to vaccine safety, effectiveness and distribution.

WASHINGTON, D.C. – The National Association of Broadcasters (NAB) today announced the creation of an advisory committee to the NAB Board of Directors that will provide insights and suggestions on diversity, equity and inclusion (DEI) issues. The committee will consist of senior-level broadcasters who are women and people of color, and may include current NAB and NAB Leadership Foundation (NABLF) board members who are committed to advancing DEI issues in broadcasting.

WASHINGTON, D.C. – In response to the inclusion of $1 billion for a vaccine awareness campaign in the American Rescue Plan Act of 2021, the following statement may be attributed to NAB President and CEO Gordon Smith: 

WASHINGTON, D.C. – In response to the introduction of the Modern Television Act of 2021 by Reps. Steve Scalise (R-LA) and Anna Eshoo (D-CA) that would eliminate the legal underpinnings of the local broadcast system, the following statement can be attributed to NAB Senior Vice President of Communications Ann Marie Cumming:

NAB Statement on Increase in Violence Against Asian Americans and March 16 Shootings in Atlanta

Washington, D.C. -- U.S. Rep. Karen Bass (CA-37) will be the inaugural guest in an exclusive new Spotlight Series from the National Association of Broadcasters (NAB) featuring members of Congress discussing key initiatives to advance diversity, equity and inclusion and their perspectives on broadcast media.

Washington, D.C. -- The National Association of Broadcasters announced Charlyn Stanberry has joined the organization as vice president of Government Relations, effective today. Stanberry will report to Shawn Donilon, executive vice president of Government Relations.

WASHINGTON, D.C. – NAB President and CEO Gordon Smith testified today before the Senate Commerce Committee's Subcommittee on Communications, Media, and Broadband at a hearing titled "Shot of Truth: Communicating Trusted Vaccine Information."

WASHINGTON, DC -- In response to a survey by the Radio Television Digital News Association (RTDNA) on broadcast newsrooms and media safety, the following statement can be attributed to NAB President and CEO Gordon Smith:

WASHINGTON, DC -- The National Association of Broadcasters Leadership Foundation announced today the finalists for the 2021 Celebration of Service to America Awards, recognizing outstanding community service by local broadcasters. One winner from each category will be announced during the Celebration of Service to America Awards program.

“Local broadcasters carry the mantel of investigative journalism, shining a light on government corruption, questioning those in power and ensuring consumers have a powerful voice to fight back against injustice. It is concerning that some public officials – typically those whose actions have been called into question – would ask the federal government to step in and censor broadcasters in violation of the First Amendment. The Federal Communications Commission must reject such unconstitutional attacks on free speech. It is a slippery slope, and one that our nation’s founders clearly sought to prevent.”

WASHINGTON, DC -- Eight members of the House of Representatives have added their support to a resolution opposing "any new performance fee, tax, royalty, or other charge" on local broadcast radio stations. The Local Radio Freedom Act (LRFA), which signals members of Congress's opposition to any potential legislation that imposes new performance royalties on broadcast radio stations for music airplay, now has 87 cosponsors in the House and eight in the Senate.

Washington, D.C. -- Radio and television stations are not adequately compensated for their news content on technology platforms because of an imbalance in market power, according to a new study released today by BIA Advisory Services. The study found that each year broadcasters lose nearly $2 billion in value that they generate for two of the largest technology platforms through publication of their valuable content – particularly local news.

WASHINGTON, D.C. – National Association of Broadcasters (NAB) President and CEO Gordon Smith delivered remarks today at NAB's State Leadership Conference. The annual gathering of 500 radio and TV station owners and executives from all 50 states is designed to educate the broadcast industry to advocate on relevant legislative and regulatory issues. This year’s conference is a virtual-only event.

WASHINGTON, DC -- Twenty-five members of the House of Representatives and six Senators have added their support to a resolution opposing "any new performance fee, tax, royalty, or other charge" on local broadcast radio stations. The Local Radio Freedom Act (LRFA), which signals members of Congress's opposition to any potential legislation that imposes new performance royalties on broadcast radio stations for music airplay, now has 112 cosponsors in the House and 14 in the Senate.

Washington, D.C. -- As founding members of the Biden Administration’s COVID-19 Community Corps, the National Association of Broadcasters (NAB) is urging all local radio and television stations to participate in a National Month of Action beginning June 4 to provide COVID-19 vaccine education and help ensure all Americans understand the importance of getting vaccinated.

Washington, D.C. -- PILOT, NAB's technology innovation initiative, will be accepting submissions for the PILOT Innovation Challenge through 5 p.m. ET on July 9. The program will provide mentorship and promotion to winning proposals, along with an opportunity to demonstrate their products at NAB Show in Las Vegas, October 9-13, 2021. 

WASHINGTON, D.C. -- Eleven members of the House of Representatives have added their support to a resolution opposing "any new performance fee, tax, royalty, or other charge" on local broadcast radio stations. The Local Radio Freedom Act (LRFA), which signals members of Congress's opposition to any potential legislation that imposes new performance royalties on broadcast radio stations for music airplay, now has 149 cosponsors in the House and 18 in the Senate.

WASHINGTON, D.C. – David Santrella, president of Broadcast Media for Salem Media Group, was elected chairman of the NAB Joint Board of Directors, NAB announced today. Santrella takes over from Jordan Wertlieb, president of Hearst Television, Inc., whose term expired.

WASHINGTON, D.C. – In response to recent incidents of violence involving broadcast journalists, the following statement can be attributed to NAB President and CEO Gordon Smith:

WASHINGTON, D.C. -- Ten members of the House of Representatives have added their support to a resolution opposing "any new performance fee, tax, royalty, or other charge" on local broadcast radio stations. The Local Radio Freedom Act (LRFA), which signals members of Congress's opposition to any potential legislation that imposes new performance royalties on broadcast radio stations for music airplay, now has 159 cosponsors in the House and 18 in the Senate.

WASHINGTON, D.C. -- The National Association of Broadcasters (NAB) and TriNet, a leading provider of comprehensive human resources for small and medium-size businesses (SMBs), will present an exclusive webinar for NAB members on July 21st at 1 p.m. ET focused on recruiting and on-boarding an empowered, diverse workforce. NAB members will receive an email invitation with registration information for this free webinar.

WASHINGTON, D.C. -- In response to passage of the MEDIA Diversity Act of 2021 (H.R. 1754) and a resolution reaffirming Congress's commitment to media diversity and pledging to work with the private sector on solutions eliminating barriers to media diversity (H.Res. 277), the following statement can be attributed to NAB President and CEO Gordon Smith:

WASHINGTON, D.C. -- Ten members of the House of Representatives and four Senators have added their support to a resolution opposing "any new performance fee, tax, royalty, or other charge" on local broadcast radio stations. The Local Radio Freedom Act (LRFA), which signals members of Congress's opposition to any potential legislation that imposes new performance royalties on broadcast radio stations for music airplay, now has 169 cosponsors in the House and 22 in the Senate.