US: Strong broad-based activity numbers - ANZ

Analysts at ANZ point out that the US economy is punching out some of the strongest broad-based activity numbers, but USD sentiment remains fickle.

Key Quotes

“Recent communication suggests some Fed officials are concerned about low inflation; and, without the prospect for higher rates, markets see little incentive to buy the dollar just yet. This week, we get an update on US consumers, with both consumer sentiment and retail sales out on Friday. We think the data won’t shift the market’s expectations for a hike.”

“Early in the week, we have an update on CPI inflation. The rise in gasoline prices may bring temporary strength to the headline number, but the core measure is key to watch. Given the current market’s pricing for the Fed (with only ~7bps priced in for Dec), any signs of firming in core CPI will bring some confidence to the USD bulls.”