China's CPI at a four month high

Chinese consumer price growth reached a four-month high in September, while producer inflation rose for the first time since 2012, raising optimism that spare capacity in the economy was beginning to ease. The consumer price index (CPI) advanced 1.9% from a year ago, following a 1.3% increase in August, the National Bureau of Statistics reported Friday. A median estimate of economists forecast CPI inflation to improve to 1.6%. Compared to August, consumer inflation climbed 0.7%, following a 0.1% increase the prior month. Economists projected a 0.3% gain over the previous month.

US CPI increased 0.2%

U.S. consumer prices rose more than expected in August as healthcare costs recorded their biggest gain in 32-1/2 years, pointing to a steady build-up of inflation that could allow the Federal Reserve to raise interest rates this year. The cost of living last month was also pushed up by sustained increases in rents. The uptick in inflation is likely to be welcomed by Fed officials when they gather next week to deliberate on monetary policy, though a rate hike is not expected at that meeting.

UK CPI increased less than expected

The Consumer Prices Index (CPI) rose by 0.6% in the year to August 2016, unchanged from July. The rate is still relatively low in the historic context although it is above the rates experienced in 2015 and early 2016. The main upward contributors to change in the rate were rising food prices and air fares, and a smaller fall in the price of motor fuels than a year ago. These upward pressures were offset by falls in hotel accommodation prices, in addition to smaller rises in the prices of alcohol, and clothing and footwear than a year ago.

The price of goods bought and sold by UK manufacturers, as estimated by the Producer Price Index, rose in the year to August 2016. This is the second increase in a row following 2 years of falls. Factory gate prices (output prices) for goods produced by UK manufacturers rose 0.8% in the year to August 2016, compared with a rise of 0.3% in the year to July 2016. The index has been following an upward trend since August 2015. The increase of 0.8% in the year to August 2016 is a continuation of the trend over the past year.

Sterling is currently being traded around 1.3280 level. Pair is likely to find support around 1.3240 area and resistance above 1.3340 handle.

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China's CPI weakened for the fourth consecutive month

Chinese consumer inflation weakened for the fourth consecutive month, while a smaller decline in producer prices raised expectations that overcapacity in the manufacturing sector was beginning to fade. The consumer price index (CPI) advanced 1.3% from a year ago, following a 1.8% increase in July, the National Bureau of Statistics reported Friday. A median estimate of economists forecast CPI inflation to weaken to 1.7% annually.