Inflation data in the US disappointed the market

• Basic consumer price index (CPI) in the USA (m/m) is 0.1%, the forecast is 0.2%.
• The number of initial applications for unemployment benefits in the US is 211K, the forecast is 219K.

The US currency was under pressure across the entire spectrum of the market after the publication of data on the consumer price index, which showed growth below 0.2% for the first time in 2018. Thus, the publication provoked an increase in pessimism regarding the forthcoming meeting of the Fed and a decrease in the profitability of the US state bonds.

The number of initial applications for unemployment benefits in the US remains near historical lows, confirming the growth of employment in the US, slightly balancing the negative effect of slowing inflation. This indicator remains on the second place, thanks to the positive dynamics of the labor market.

Technically, the US dollar index broke the uptrend and moved to the correction phase, which opens the way to support levels: 92.60 and 92.40. The main pressure on the dollar is exerted by its overbought, after unloading of it and overbought Forex indicators the recovery of trend is possible.

Graph of the US dollar index. The current price is 92.60 (the profitability of 10-year government bonds is a blue line)

Anton Hanzenko