Oh, the Bureau of Labor Statistics (BLS) is at it again, folks! This Wednesday, they’re unleashing the February Consumer Price Index (CPI) data like a wild goose chase for economists. Expect inflation to do the tango-steady, but still above the Fed’s 2% target. It’s like a never-ending sitcom, but with more spreadsheets!
The monthly CPI is predicted to rise 0.3%, because why not? January gave us a measly 0.2%, so clearly, it’s time to spice things up. Annually, it’s holding steady at 2.4%, like a stubborn mule refusing to budge. Core CPI, the diva that excludes food and energy prices, is expected to sashay in at 0.2% monthly and 2.5% yearly. Ooh la la!
Now, here’s the kicker: the February CPI data is like a time capsule-it won’t reflect the chaos of rising crude oil prices after the US and Israel decided to throw a party with Iran on February 28. WTI prices shot up from $67 to $110 faster than you can say “economic whiplash,” but then corrected lower. Drama, drama, drama!
What’s Next in the CPI Circus?
February’s CPI figures are about as surprising as a Mel Brooks punchline-not very. In the past six releases, core CPI has been either 0.2% or 0.3%, like a broken record. The only exception? A 0.4% jump in August 2025, probably because someone left the inflation oven on too high.
The ISM’s PMI reports are like a mixed bag of jokes-some land, some don’t. The Manufacturing PMI’s Prices Paid Index jumped to 70.5 in February, while the Services PMI’s index dropped to 63. It’s like one guy’s laughing and the other’s crying. Classic!
TD Securities analysts are previewing the inflation data with all the excitement of a tax auditor: “the February CPI report should begin to show a moderation in services inflation, which will help build confidence for the FOMC.” Yawn. But wait, there’s more!
“Core CPI likely moderated to 0.23% m/m because services inflation took a nap, and tariffs were less of a party pooper. Headline CPI? Oh, it’ll jump to 0.25% m/m because energy prices decided to rebound. Our forecast? 2.5% and 2.4% y/y for core and headline, respectively. Riveting, right?”
Will EUR/USD Do the Cha-Cha or the Tango?
Markets are betting the Fed won’t cut rates in March-shocker! They’re only pricing in a 12% chance of a 25 bps cut in April. Meanwhile, the odds of a fourth consecutive policy hold in June are nearly 70%, thanks to the US-Iran war. But then, disappointing labor data and easing oil prices dragged that probability back below 60%. It’s like a soap opera, but with more charts!
If the monthly core CPI print surprises on the downside (0% or lower), investors might rethink a June rate cut, and the USD could take a nosedive. But if it comes in above 0.3%, the USD might flex its muscles. Still, don’t expect investors to go all-in-energy prices are as volatile as a Brooks comedy sketch.
Eren Sengezer, FXStreet’s European Session Lead Analyst, gives us the technical lowdown on EUR/USD:
“The RSI on the daily chart rebounded from near-30 but stayed below 50, meaning EUR/USD is still figuring out its dance moves. It’s below the 1.1675-1.1700 resistance area, reinforced by the 200-day SMA, Fibonacci 61.8% retracement, and the 100-day SMA. If it can’t reclaim this area, 1.1600-1.1590 is the next stop, followed by 1.1500-1.1470. Looking up, resistance levels are at 1.1750 and 1.1820. It’s like a financial ballet!”
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2026-03-11 09:52