Inflation is moving in the right direction, at least the type the Fed cares about: core inflation. It rose 2% y/y in November as expected. M/m it is +0.2% as predicted. Headline inflation, that includes also the volatile gasoline prices, remained flat m/m but surprised with +0.5% y/y. The Empire State Manufacturing Index recovered to -4.6 points, still in negative territory.
The Fed has what it needs to hike, also in terms of inflation.
EUR/USD remains under 1.10, USD/JPY is above 121 and USD/CAD is above 1.37. The Canadian dollar was specifically hit by a disappointing manufacturing sales number: a drop of 1.1%.
The United States was expected to report a rise in core inflation from from 1.9% to 2% in November. Month over month, the rise was expected to be 0.2%. Headline inflation carried expectations of no change m/m and +0.4% y/y, influenced by oil prices of course.
The US dollar was making a recovery of sorts, with EUR/USD under 1.10.
This is the last important release before the Fed decision tomorrow.
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