#USCPIDataIncoming

On Tuesday, November 10, at 16:30, the Consumer Price Index for October will be released. The data in question will be decisive for the short-term direction of prices. Therefore, I prefer not to trade before the release and in the minutes when it is released.

The data is out on Tuesday, November 10, at 16:30 Turkey time, 08:30 US time. It is the consumer price index for October. Producer prices are also out in the same week. This is one of the most important pieces of data the central bank will see before its December 8-9 meeting.

Let us recall September. Headline had risen to 3.7% year over year, it was 3.4% in August. So the fall had stopped, it had turned up again. Now everyone is looking at what October will show.

What do forecasts say, let me say it clearly. The Cleveland side's live forecast sees October headline at +0.24% month over month, 3.74% year over year. Core at +0.21% month over month, 2.48% year over year. Another forecast sees headline at +0.30% month over month, core at +0.21%. One more sees +0.3% for both headline and core. So on a monthly basis we are hovering somewhere between 0.21% and 0.30%. On a yearly basis, around 3.7%.

What does this mean, let me say it simply. If monthly comes at 0.2%, the market will say "prices are still up, but not out of control." If monthly comes at 0.3% and above, it will say "sticky, not falling." If monthly comes cold like 0.1%, everyone will breathe a sigh. That is why a single digit after the comma moves billions of dollars in positions.

My view on this data is this. CPI alone does not set the rate decision. But with odds of a rate hike in December up in the 80s, CPI will either strengthen that view or weaken it. If it comes hot, the mood of "a hike in December is sure" grows, the dollar gets stronger, risk assets struggle. If it comes cold, the mood of "maybe there will be no hike" comes, the market breathes. So this data is not just a price data. It is like a rehearsal for the December decision.

So what will I do on Tuesday? Let me say it openly. I will not grow my position before the data. Because trading on a guess before the data is like tossing a coin. I will not trade in the first 10 minutes after the data either. In those first minutes, the price spikes to both sides, there are a lot of fake moves. I will read the data and look at headline and core together.

There are three places I will look at, but not like a list, just like I hold it in my mind. What did headline monthly come at, what did core monthly come at, and was the prior month revised. Core matters, because it looks without food and energy, it shows the more lasting part. If headline is hot and core is cold, the market will look at core. If both are hot together, it gets hard.

What if I am wrong? Data comes cold, price jumps, I will be late. I am okay with that. Data comes hot, price falls, I will not have been caught early. This week taught me that. The one who goes in early on data day usually ends up under the data.

What I feel inside is clear: On Tuesday at 16:30, October CPI is coming, forecast is in the 0.2-0.3% band monthly, around 3.7% yearly, September was 3.7%. This data will set the mood for the December decision. That is why I will not rush on Tuesday. Let the data come, let the first dust settle, let me put headline and core side by side and then decide.

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