The U.S Bureau of Labor Statistics released October CPI figures which were largely in line with market expectations. The headline inflation rate came in at 0.2% for the month, reversing September’s -0.2% result as energy prices rose and the USD paused its upward climb. The year-to-date figure was +0.1%, up from September’s comparable figure of 0.0% and in line with market expectations. Core inflation, which strips out the more volatile food and energy components, rose 1.9% for the last 12 months, the same as September’s figure of 1.9% and also in line with market expectations. The US 10 year bond rate finished the day lower, down 2bps to 2.25%.
ANZ said the data was “supportive of a December Fed rate hike.” Baillieu Holst took a similar view and said the “less than threatening US inflation numbers” cut back market expectations of a December rate rise but this would not change its own in-house view.
