Published: Sat, October 14, 2017
Business | By Max Garcia

U.S. consumer price inflation disappoints

U.S. consumer price inflation disappoints

Gold prices were little changed amid a steady dollar on Friday, halting a five-day rally as investors wait for key US inflation data for clues on the outlook for potential hikes in USA interest rates.

The dollar steadied in early Asian trading on Friday, on track for weekly losses as investors awaited the US inflation data to gauge the likelihood that the Federal Reserve will stick to its plan to raise interest rates again this year.

Slovakia's consumer price inflation accelerated for the third straight month in September, though marginally, data from the Statistical Office of the Slovak Republic showed Friday.

Excluding automobiles, petrol, building materials and food services, retail sales increased 0.4 per cent last month after being unchanged in August.

"PPI was a little bit better, but that doesn't really translate well to CPI", said Gennadiy Goldberg, an interest rate strategist at TD Securities in NY.

The annual average inflation, measured by CPI, in the last 12 months (October 2016 - September 2017) compared to the previous 12 months (October 2015 - September 2016) was 1.3%.

U.S. Treasury prices gained after the Treasury Department saw strong demand for a sale of 30-year bonds.

In U.S. stocks, banks and media companies were the biggest drags on the S&P 500 as AT&T Inc fueled concerns about video subscribers and investors took fright at comments from JPMorgan and Citigroup on consumer debt. Core prices had been expected to rise by another 0.2 percent. Core prices had been expected to rise by 0.2 percent.

Month-on-month, consumer prices edged up 0.2 percent in September after remaining flat in the preceding month.

The 30-year bond last rose 9/32 in price to yield 2.8388 percent, from 2.853 percent late on Thursday. Sterling had climbed to an intraday high of $1.3324 after German newspaper Handelsblatt late Thursday reported that the European Union may offer a two-year Brexit transition deal to Britain.

Sterling last traded at $1.3273, up 0.39 percent on the day.

The dollar, which was yoyoing against the pound all morning, fell again to 1.3320 on the news to extend losses on the day to 0.44%, while spiking down on the euro 0.3% to 1.1866.

Policymakers could, however, find solace from another report indicating that the U.S. economy was swiftly recovering from the damage inflicted by Hurricanes Harvey and Irma, with a strong rebound in retail sales last month.

Spot gold added 0.1 percent to $1,293.37 an ounce.

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