Yesterday’s macro diary was data-driven and focused on the United States. Headline retail sales for August exceeded estimates, and several of the key underlying statistics were also positive.
US industrial production for August again exceeded expectations, despite downward revisions to previous months. Meanwhile, homebuilder sentiment in September followed yesterday’s trend of consensus outperforming US statistics.
The dollar was not much impacted by the strong US macro newsflow. The majority of the FX majors remained inside very narrow ranges, however, sterling has taken on a slightly softer tone in the last 24 hours.
This morning, the UK CPI inflation numbers for August were revealed. The headline CPI maintained at 2.2%, while the core CPI came in slightly higher than expected at 3.6% (vs. 3.5% forecast).
Looking ahead, the previously mentioned Fed rate decision (after the European close) is a major focus for markets and carries significant event risk for the dollar. The Fed has indicated that it will lower interest rates today.
However, there is some uncertainty over the size. In recent days, there has been talk that the Fed may opt for a 50bps cut rather than a 25bps one. Aside from the rate announcement, Fed Chair Powell’s press conference will be eagerly watched.
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