"The dollar held in consolidation on Monday, with investors focused on upcoming US inflation figures and the Federal Reserve's policy outlook. Treasury yields were mixed, though the 10-year slipped slightly. Attention now turns to Tuesday's September Producer Price Index, where headline inflation is expected to rise 0.3% following a 0.1% decline in August. A stronger-than-expected reading could dampen expectations for a December rate cut, offering support to both the dollar and yields."
"Conversely, softer data would reinforce the shift toward a more dovish policy stance. Market pricing currently assigns roughly a 60-70% probability to a quarter-point cut in December, though Fed officials continue to send mixed signals. However, New York Fed President John Williams' dovish comments left the door open for further easing expectations. Investors will also closely monitor the ADP Weekly Employment Change due tomorrow, which could provide an early indication of labour-market momentum following last week's ambiguous payroll release."
The dollar remained in consolidation as investors focused on upcoming US inflation figures and the Federal Reserve's policy outlook. Treasury yields were mixed, with the 10-year slipping slightly. Attention turned to Tuesday's September Producer Price Index, with headline inflation forecast to rise 0.3% after a 0.1% decline in August. A stronger-than-expected PPI reading could reduce expectations for a December rate cut and support the dollar and yields, while softer data would reinforce a dovish policy shift. Market pricing puts roughly a 60–70% probability on a quarter-point December cut, though Fed officials have sent mixed signals. New York Fed President John Williams' dovish remarks widened expectations for further easing. Investors will also watch the ADP Weekly Employment Change for early labour-market momentum signals after an ambiguous payroll report.
Read at London Business News | Londonlovesbusiness.com
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