US Core CPI m/m 02/19/2010

8:30am (NY Time) US Core CPI m/m  Forecast 0.2%  Previous 0.1%
ACTION: USD/JPY        BUY 0.4%      SELL 0.0%

We’ll be focusing on the Core CPI release today and our minimum tradable deviation deviation is 0.2%;  if the release number (core) increases to a minimum 0.4% then we will BUY USD (either SELL EUR/USD or BUY USD/JPY).  If the CPI number stays flat or decreases to 0.0% or less, we’ll SELL USD (BUY EUR/USD or SELL USD/JPY).  Historically even at a difference of 0.1%, market is likely to to exaggerate its move, therefore if either of our tradable releases is hit, there is about 80% of chance market will move 50 pips. 

With yesterday’s  hike in the discount rate from Federal Reserve to 0.75% (discount rate is different from Federal Fund Rate, Federal Fund Rate is at 0.25%), USD is at the peak of its bullish sentiment.  Market is likely to move in a strong USD and risk appetite direction today as this move clearly signals for further USD strength… therefore any short term bias for USD should be bullish.

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:

1. US Core CPI m/m 11/18/09
2. US CPI m/m 10/15/09
3. US Core CPI m/m 09/16/09
4. Canada Core CPI m/m 02/18/2010
5. Canada Core CPI m/m 10/16/09
6. Canada Core CPI m/m 11/18/09
7. Canada Core CPI m/m 09/17/09
8. US Core Retail Sales m/m 10/14/09
9. Canada Core CPI m/m 12/17/09
10. US Core Retail Sales m/m 11/16/09