US Core CPI m/m 12/16/09

8:30am (NY Time) US Core CPI m/m  Forecast 0.1%  Previous 0.2%
ACTION: USD/JPY        BUY 0.3%      SELL -0.1%

We’ll be looking to trade Core CPI release and we are going to look  for a surprise factor of 0.2%;  if the release number (core) increases to a 0.3% then we will BUY of USD/JPY.  If the CPI number decreases to -0.1% or less, we’ll SELL USD/JPY.  Historically even at a difference of 0.1%, market is likely to to exaggerate, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips.  If you remember what I wrote last time, this is exactly the same consensus expectation as the market is looking at a low yet steady growth in U.S. Inflation for quite some time now…

Since US CPI is considered as global news event, and with the recent rise in demand for USD because of the better outlook along the safe-haven currency status, a stronger than usual release of the Core CPI could bring about real expectation for FOMC to accelerate their interest rate tightening policy.  Therefore I’d definitely watch how the market react tothis release as a whole for more insights.

DEFINITION:

“CPI, Consumer Price Index, is a statistical estimate of the movement of the prices of goods and services bought for consumption purposes by households. Its computation uses price data collected for a sample of goods and services from a sample of sales outlets in a sample of locations for a sample of times and estimates of the shares of the different expenditures in the total covered by the index which are usually based upon expenditure data obtained for sampled periods from a sample of households wikipedia).”  It is also known as the “True Cost of Living”.

Related posts:

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3. US Core CPI m/m 09/16/09
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6. Forex Trade Plan For Canada Core CPI m/m 09/21/10
7. Forex News Trading Canada Core CPI m/m 11/23/10
8. Forex News Trading Canada Core CPI m/m 10/22/10
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Tagged as: Consumer Price Index, Consumer Price Inflation, Consumption, Core CPI, Core Increases, CPI, CPI ex AUTO, Cpi Index, CPI less Auto, CPI m/m, cpi number, Fundamental News, fundamental outlook, Global News, Inflation, risk appetite, risk aversion, Statistical Estimate, US, US CPI, USA, USD