The ranges of estimates are important in terms of market reaction because when the actual data deviates from the expectations, it creates a surprise effect. Another important input in market's reaction is the distribution of forecasts.

In fact, although we can have a range of estimates, most forecasts might be clustered on the upper bound of the range, so even if the data comes out inside the range of estimates but on the lower bound of the range, it can still create a surprise effect.

CPI Y/Y

  • 2.5% (6%)
  • 2.4% (61%) - consensus
  • 2.3% (31%)
  • 2.2% (2%)

CPI M/M

  • 0.6% (1%)
  • 0.4% (4%)
  • 0.3% (58%) - consensus
  • 0.2% (32%)
  • 0.1% (4%)
  • 0.0% (1%)

Core CPI Y/Y

  • 3.0% (2%)
  • 2.9% (18%)
  • 2.8% (62%) - consensus
  • 2.7% (18%)

Core CPI M/M

  • 0.6% (1%)
  • 0.4% (6%)
  • 0.3% (66%) - consensus
  • 0.2% (24%)
  • 0.1% (3%)

Now that the expectations around an average 10% global tariff rate solidified and growth fears eased, the focus might switch back to inflation. The market might start to expect stronger economic activity ahead, therefore slower progress on inflation could deter the Fed from cutting rates and even lead to the market pricing in less rate cuts than previously expected. This should be supportive for the US Dollar in the short-term as Treasury yields rise.

Source: Forex Live