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Inflation on the menu in European trading today

Major currencies are mostly lightly changed as we look towards European trading as it is only commodities that are being heavily impacted by the violence in the Middle East. The Israel-Hamas conflict rages on and that is continuing to keep a bid in gold and oil this week, with the former looking to break higher above key technical levels.

But for the rest of the market, higher Treasury yields will remain a concern. Stocks managed to brush off the losses yesterday with a late comeback, following a more upbeat US retail sales data once more. It once again details the strength of the US economy and how it is still holding up much better than the rest of the world. In other words, the Fed has more confidence than everyone else to stick with the higher for longer narrative and that’s a net positive for the dollar.

As for today, we’ll examine UK inflation data once again to see if the BOE can keep with its recent pause rhetoric. Core annual inflation is estimated to drop to 6.0% from 6.2% previously so that is the key reading to watch. Later on, we’ll also get Eurozone inflation data but that is just the final readings for September (not going to have much impact).

0600 GMT – UK September CPI figures
0900 GMT – Eurozone September final CPI figures
1100 GMT – US MBA mortgage applications w.e. 13 October

That’s all for the session ahead. I wish you all the best of days to come and good luck with your trading! Stay safe out there.

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