BREAKING: EURUSD jumps after mixed US CPI data

US CPI report for May was released today at 1:30 pm BST. While inflation data from the United States is always closely watched by market participants, today's report had additional gravity as two-day FOMC decision meeting begins today. Some saw today's data as a key to whether the FOMC will announce a hike or hold tomorrow at 7:00 pm BST. Market was expecting another slowdown in US CPI inflation.

Actual report turned out to be mixed - headline CPI slowed more than expected while core gauge slowed in-line with expectations. However, it should be said that expectations for core CPI were split between 5.2 and 5.3% YoY so the data can be seen as a slight beat.

Report can be seen as puzzling for FOMC but it also seems to be not hawkish enough to encourage US central bankers to deliver a rate hike tomorrow. Markets seem to share this view and reaction can be seen as dovish - USD dropped while gold and equity indices moved higher in a knee-jerk move.

US, CPI inflation for May

• Headline (annual): 4.0% YoY vs 4.1% YoY expected (4.9% YoY previously)
• Headline (monthly): 0.1% MoM vs 0.2% MoM expected (0.4% MoM previously)
• Core (annual): 5.3% YoY vs 5.3% YoY expected (5.5% YoY previously)
• Core (monthly): 0.4% MoM vs 0.4% MoM expected (0.4% MoM previously)

Headline US CPI continues to plunge while slowdown in core measure has slowed. Source: Macrobond, XTB

EURUSD spiked after release of mixed US CPI data for May. Source: xStation5