THE TAKEAWAY: USD Consumer Price Index (OCT) > +2.2% versus +2.1% expected, prior +2.0% (y/y) > Initial Jobless Claims (NOV 10) > 439K versus 375K expected, prior 361K (revised from 355K) > USD/JPY BULLISH
The pre-open US data released today bucked recent trends of US data outperformance that has been in place for the past several weeks, with labor market data coming in worse than expected and inflation data coming in hotter than forecasted. However, neither has done much to derail the USD/JPY’s tremendous upside run today.
The October Consumer Price Index printed +2.2% year-over-year versus +2.1% y/y expected, from +2.0% y/y, as higher food and energy costs increased prices paid over the course of last month. This is the highest headline inflation rate in six months, since April 2012. When the headline is stripped to its Core, Ex Food & Energy, the yearly rate was on hold at +2.0%. Generally speaking, higher inflation rates are positive for the US Dollar.
The Initial Jobless Claims figure for the week ending November 10 was quite negative, however. The actual came in at 439K, well-above the 375K forecasted, according to a Bloomberg News survey. Whereas last week there was a very strong reading (355K) following Hurricane Sandy, it’s clear that the storm had a negative impact overall, with claims rising back to their highest level since October 2012.
USD/JPY 1-minute Chart: November 15, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the release, the USD/JPY initially dipped from 81.32 to 81.26, but has since rallied to fresh new highs at 81.47. At the time this report was written, the USDJPY was trading at 81.38.
--- Written by Christopher Vecchio, Currency Analyst
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