n the euro area, the main event will be the release of preliminary Germanconsumer prices for September. We expect HICP inflation to stay unchanged at 0.8%y/y but for the euro area as a whole we still expect the inflation data, releasedtomorrow, to show that inflation in September eased to a new cycle low of 0.3% y/yon the back of lower energy prices.
In the US focus will also be on inflation with the release this afternoon of the PCEdeflator– Fed’s preferred inflation measure. We expect inflation to ease to 1.4% y/yin August from 1.6% y/y, underscoring that inflationary pressure has again started toease and that inflation remains below Fed’s 2% target. Personal consumption isexpected to have increased a solid 0.5% m/m in August despite relatively subduedincome growth.
We have a very eventful week ahead of us where focus will be on the ECB meetingon Thursday and ISM-manufacturing and the September labour market report in theUS on Friday.
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