Headline CPI came out at 0.4% as expected, but y/y it is up 2.6%, better than predicted. More importantly, core PPI jumps 0.4% m/m and 2.2% y/y, both exceeding early estimations. In addition, jobless claims fall to 243K, better than expected.

All in all, the positive figures are supporting the US dollar. EUR/USD is down to 1.1850, USD/JPY is at 112.30 and GBP/USD extends its drops.

Can this positive data continue? We will get the more important information tomorrow.

The US was expected to report a rise of 0.4% in producer prices in the month of September, higher than the gain of 0.2% reported for August. Year over year, an increase of 2.5% was expected. Core PPI carried expectations for +0.2% m/m and 2% y/y.

Weekly jobless claims were forecast to slide back to normal levels after the hurricanes sent them shooting higher: a drop from 260K to 251K was on the cards.

The US dollar lost some steam. The Fed minutes, and perhaps more importantly, the worries that Fed member Evans expressed, halted the dollar’s rise. The bigger inflation report for markets comes tomorrow: the CPI number.

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