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Uk Cpi

  • #1
  • First Post: Oct 17, 2006 3:31am Oct 17, 2006 3:31am
UK CPI result was 2.4?
RPI is also high.

Seems like too hot to handle for BOE.

Will they decide a rate hike?

This is the hot rumor abound that has kept GBP above USD.


One of my broker spiked down touching my short for a loss. Then my long went up for a profit. Later on I faded for another profit.
  • #2
  • Oct 17, 2006 3:42am Oct 17, 2006 3:42am
Quoting BurgerKing
UK CPI result was 2.4?
RPI is also high.

Seems like too hot to handle for BOE.

Will they decide a rate hike?

This is the hot rumor abound that has kept GBP above USD.


One of my broker spiked down touching my short for a loss. Then my long went up for a profit. Later on I faded for another profit.
According to tradethenews.com the numbers are 0.1 m/m for CPI and 0.5 m/m for RPI. The 2.4 you are referring to is the y/y number. Both results are in line or low, not high.....I'm no news trader but I think thats right.
  • #3
  • Oct 17, 2006 3:45am Oct 17, 2006 3:45am
The CPI was a bit firmer than expected. But the US inflation data will get more attention later today.
Always wait for the opportune moment… just be careful not to miss it.
  • #4
  • Oct 17, 2006 3:50am Oct 17, 2006 3:50am
Quoting jhathawa
According to tradethenews.com the numbers are 0.1 m/m for CPI and 0.5 m/m for RPI. The 2.4 you are referring to is the y/y number. Both results are in line or low, not high.....I'm no news trader but I think thats right.
Yeah.. u are right!!
  • #5
  • Oct 17, 2006 3:58am Oct 17, 2006 3:58am
Now that is ODD!

Why did it go up when the number is bad for UK?

This does not make sense.
  • #6
  • Oct 17, 2006 4:03am Oct 17, 2006 4:03am
Brokers want the big stop losses above .8650
  • #7
  • Oct 17, 2006 4:19am Oct 17, 2006 4:19am
Quoting BurgerKing
Now that is ODD!

Why did it go up when the number is bad for UK?

This does not make sense.
No, I dont think so. IF the CPI of a country is weak than it's previous it means the currency will going up and for the PPI is the other hand
  • #8
  • Oct 17, 2006 4:20am Oct 17, 2006 4:20am
Quoting rchapmand
Brokers want the big stop losses above .8650
What do u mean?
  • #9
  • Oct 17, 2006 4:37am Oct 17, 2006 4:37am
This is a quote from my news feed:-

Tripped stops above 1.8655 have helped inflate cable to a one-week
highs circa 1.8670. September"s as-forecast UK CPI (See 42331 ) is underpinning the pound, as it maintains the expectation that the UK base rate will be hiked by 25bp to 5.0% next month (November 9). The UK base rate was last at 5.0% in early September 2001.

Touted bull targets north of 1.8670 include 1.8700, 1.8740, and 1.8775.
1.8650/55 is now a pullback support window.
Fresh market-moving influence over GBP may be exerted by a slated 10:20GMT speech from perceived MPC hawk John Gieve.

End Quote
  • #10
  • Oct 17, 2006 4:41am Oct 17, 2006 4:41am
Quoting rchapmand
This is a quote from my news feed:-

Tripped stops above 1.8655 have helped inflate cable to a one-week
highs circa 1.8670. September"s as-forecast UK CPI (See 42331 ) is underpinning the pound, as it maintains the expectation that the UK base rate will be hiked by 25bp to 5.0% next month (November 9). The UK base rate was last at 5.0% in early September 2001.

Touted bull targets north of 1.8670 include 1.8700, 1.8740, and 1.8775.
1.8650/55 is now a pullback support window.
Fresh market-moving influence over GBP may be exerted by a slated 10:20GMT speech from perceived MPC hawk John Gieve.

End Quote
So, it means GBP would still going up until it's hit the 1.8700 area?
  • #11
  • Oct 17, 2006 4:43am Oct 17, 2006 4:43am
Quoting c1ro
No, I dont think so. IF the CPI of a country is weak than it's previous it means the currency will going up and for the PPI is the other hand
I agree with u, if the CPI is weak than it's previous, the currency will go up. And for PPI, if the reading is weak than it's previous, the currency will go down.
But, just for a reminder, the opposite of our analysis happened. Do you remember about last month's US CPI ? The reading was stronger than last month, and the currency moved up instead of going down.
It was due to market expectation for strong inflation reading from the consumer side and it speculated the market opinion about Fed's rate hike. So, which one will happen today? Is it regular and common analysis as we known already or Fed's rate hike speculation again? Do you have any comment?
Hello World
  • #12
  • Oct 17, 2006 4:50am Oct 17, 2006 4:50am
Quoting c1ro
So, it means GBP would still going up until it's hit the 1.8700 area?
Yes 1.8702 is the next resistance on the way up
  • #13
  • Oct 17, 2006 4:54am Oct 17, 2006 4:54am
Quoting rchapmand
Yes 1.8702 is the next resistance on the way up
So, how about the reversal? I think the bear move is not completed yet.
  • #14
  • Oct 17, 2006 4:56am Oct 17, 2006 4:56am
With respect to the USD and US CPI/inflation data, the fx response is a little bit higglety pigglety, but if you look at the UK inflation data and the response in sterling, the effect tends to be far more clear cut. Higher inflation (vs expecs) = a higher pound.

Todays CPI was in line with expectations, but all pay deals, pensions etc etc are linked to the RPI (the old inflation measure). This rose 3.6% y/y (very high by historical standards) against the consensus of 3.4% y/y. And the core RPI increased a little above the consensus as well.

This should reinforce expectations of a Nov rate hike.
"Always bet on black"
  • #15
  • Oct 17, 2006 5:05am Oct 17, 2006 5:05am
...also the core CPI crept up from 1.1% to 1.4% y/y. If you look at the breakdown in the CPI numbers, you will see that the drop in the headline is very much driven by fuels and lubricants (-6.2%). Nearly all the other categories experienced increases.
"Always bet on black"
  • #16
  • Oct 17, 2006 5:11am Oct 17, 2006 5:11am
Quoting abobtrader
...also the core CPI crept up from 1.1% to 1.4% y/y. If you look at the breakdown in the CPI numbers, you will see that the drop in the headline is very much driven by fuels and lubricants (-6.2%). Nearly all the other categories experienced increases.
So, it means the market will lose their interest from buying USD?
  • #17
  • Oct 17, 2006 5:17am Oct 17, 2006 5:17am
hey, if I knew the answer to that ... I'd be writing this from my yacht!

...also, I'd be careful using a GBP inflation number to call sentiment on the USD. That could be a risky game. Focussing on the pound, this week has the potential to be critical. Tomorrow we have the BoE minutes and the labour mkt report (keep an eye on core wage growth), then on Thursday we have retail sales, and then the first cut of the GDP number on Friday.
"Always bet on black"
  • #18
  • Oct 17, 2006 5:18am Oct 17, 2006 5:18am
Quoting c1ro
So, how about the reversal? I think the bear move is not completed yet.
I agree with you that the bear move is not over yet. This is just a correction to the bigger picture the bear move. I just follow the price action I don't make perdictions.

Price was rejected at 1.8880 last week when NFP was released so we could have a run at that before the bear move continues but then again who knows what the market will do just follow the price.
  • #19
  • Oct 17, 2006 5:22am Oct 17, 2006 5:22am
Quoting rchapmand
I agree with you that the bear move is not over yet. This is just a correction to the bigger picture the bear move. I just follow the price action I don't make perdictions.

Price was rejected at 1.8880 last week when NFP was released so we could have a run at that before the bear move continues but then again who knows what the market will do just follow the price.
Nice statement btw, what indicators do u use?
  • #20
  • Oct 17, 2006 5:29am Oct 17, 2006 5:29am
Quoting c1ro
No, I dont think so. IF the CPI of a country is weak than it's previous it means the currency will going up and for the PPI is the other hand
Eh???

Lowered CPI = weak economy = therefore STRONG MONEY?

You must be the first one to have said that.

We are talking about UK's CPI not US CPI in that last data
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