US: Core PCE inflation expected to firm modestly - TDS

Analysts at TDS suggest that the US Core PCE inflation is expected to firm modestly in October as they are broadly in line with the market and looks for core PCE inflation to rise to 1.4% y/y, reflecting a 0.2% increase on the month.

Key Quotes

“Headline PCE inflation should slip to 1.5% y/y from 1.6% in September, with prices up 0.1% m/m.”

“We are also on-consensus for personal income and spending and look for a 0.3% m/m increase in each. Chicago PMI is the only other release on the calendar and the market looks for a pullback to 63.0 form 66.2, the latter of which is a six-year high.”

“Looking past the data, Dallas Fed President Kaplan is set to participate in a moderated Q&A at 13:00 ET. Kaplan is a 2017 voter and suggested earlier this week that he is on board with a December rate hike. Vice Chair of Supervision Randall Quarles is scheduled to speak about the payments system at 12:30 ET at a conference hosted by the Cleveland Fed.”