Euro zone CPI will hardly support the Euro

Euro area's October inflation figures are awaited. The situation is quite similar to that in Japan. The rate of inflation is likely to remain slightly negative (-0.1% yoy). The market is somewhat more optimistic and expects an "improve-ment" to 0.0%. 

"The figures will not satisfy the ECB and will not dampen expectations of an expansion of the QE programme. EUR-USD is therefore still trading below 1.10 this morning. And US inflation figures are likely to show this afternoon that the situation over there is, indeed, better", says Commerzbank. 

The core rate of the PCE deflator, which is the Fed's preferred measure, was probably up by 1.4% in September. While it is below the target of 2%, the deviation is limited. If the figures surprise to the upside, the USD might even firm somewhat, as this would be another signal for the markets that the Fed might engineer a lift-off on 16 December.