EUR/USD, USD/JPY flows - intervention verbals keep capping; PPI data next test

Relatively quiet, neither Nvidia woes nor the Microsoft outage seeming to make a big net splash in tech sentiment yet. Japan keeps up the verbals with FinMin Katayama. USD/JPY remains capped below 160, but will likely continue to test out supply there, after consolidation. Fed’s Williams the latest Fed speaker to echo that there is ‘work to do’ on inflation.

Inflation remains in focus, though much of the damage has already been done by the CPI data, in terms of outlook reset. We expect October PPI to increase by 0.4% overall and 0.3% ex food and energy, still too high for comfort. This would see yr/yr growth overall rising to 6.7% from 6.3%,  highest since November 2022, though we expect the yr/yr ex food and energy pace to be unchanged at 5.0%. Firm numbers could keep the dollar well supported as it consolidates its initial runup.