Later today, Wednesday, 15 December, we get the US consumer inflation data for November 2024
due at 1330 GMT which is 0830 US Eastern timeUS December CPI preview - forecasts from 17 investment bank economistsGoldman Sachs headline and core US December CPI forecasts
The PPI was out on Tuesday:
Forexlive Americas FX news wrap 14 Jan: PPI final demand lower than expectations.CPI next.CPI Headline y/y range of estimates:
CPI Headline m/m:
CPI excluding food and energy (the core rate of inflation) y/y:
0.2 to 0.3%
Why is knowledge of such ranges important?
Surprise Factor: Markets often price in expectations based on forecasts and previous trends. When data significantly deviates from these expectations, it creates a surprise effect. This can lead to rapid revaluation of assets as investors and traders reassess their positions based on the new information.
Risk Reassessment: Unexpected data can lead to a reassessment of risk. If data significantly underperforms or outperforms expectations, it can change the perceived risk of certain investments. For instance, better-than-expected economic data may reduce the perceived risk of investing in equities, leading to a market rally.
Liquidity and Market Depth: In some cases, extreme data points can affect market liquidity. If the data is unexpected enough, it might lead to a temporary imbalance in buyers and sellers, causing larger market moves until a new equilibrium is found.
Chain Reactions and Correlations: Financial markets are interconnected. A significant move in one market or asset class due to unexpected data can lead to correlated moves in other markets, amplifying the overall market impact.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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