[MARKET ANALYSIS] DXY is flat awaiting US CPI; Antipodeans outperform on the risk tone and Chinese data

DXY was initially under mild pressure following on from the dovish remarks from Fed’s Williams and as crude benchmarks moved lower in early morning trade. However, a bounce back in oil prices and hawkish commentary from the Houthis has allowed the index to sit around the unchanged mark, within a 102.07 to 102.23 range. To recap that announcement, the group warned that it will continue operations towards Saudi airports/oil facilities in the coming days; it also warned global shipping companies. Analysts expect US headline CPI to rise +0.6% M/M in September (prev. 0.4%), with the annual rate rising to 3.6% Y/Y (prev. 3.4%). The core measure is seen rising +0.2% M/M (prev. 0.3%), cooling from August’s rate, which was the fastest pace in four months, driving the Fed to fire its first rate hike since 2023; the annual core rate is seen nudging up to 2.5% Y/Y (prev. 2.4%). G10s are mixed against the USD, vs initial gains across all majors early doors. The Antipodeans remain the outperformers, on the back of stronger-than-expected Chinese Export data, and with Chinese CPI Y/Y rising from the prior, albeit less than expected. The broader positive risk tone across markets is also facilitating the strength in Antipodeans today. Typical havens (CHF and JPY) are the slight underperformers this morning, given the broader risk tone. GBP and EUR are both essentially flat. For the former, UK press have been boosting their coverage ahead of the Autumn Budget (Oct 28th). The Times reported that UK Chancellor Healey is expected to pay for new giveaways in this month's budget, with higher taxes or spending cuts rather than more borrowing. This will offer investors some confidence on the fiscal side of things. Elsewhere, UK Chancellor Healey is to target online marketplaces in a GBP 1bln tax crackdown, in which the UK plans to make them responsible for collecting tax owed by retailers selling on their platforms.