The S&P/ASX 200 Index (ASX: XJO) has given back some of its earlier gains but remains up 0.3% in afternoon trade on Thursday.
While there's plenty happening on a company specific level for many stocks today, investors will also be mulling over the latest batch of inflation data out of the United States.
That's because, like it or not, what happens with inflation and interest rates in the world's top economy will inevitably have a spillover impact on the Aussie economy and the ASX 200.
With that said, here are the latest consumer price index (CPI) figures reported by the US Bureau of Labor Statistics yesterday, overnight Aussie time.
ASX 200 edges higher amid US inflation data
Last night's CPI data indicates that the US Federal Reserve has made headway in its efforts to tamp inflation back down to its 2% target, while the final stretch may take some time yet.
Headline inflation in October was up 0.2%, while monthly core inflation (which excludes volatile food and energy costs) increased by 0.3%. Both figures were broadly in line with consensus estimates, likely helping moderate any big swings higher or lower on the ASX 200 today.
On an annual level, headline inflation edged higher to 2.6% while core inflation – the preferred measure for both the Fed and the RBA here in Australia – remained at 3.3%.
Despite inflation remaining above target, markets are placing 80% odds that the US Federal Reserve will deliver a third consecutive interest rate cut (this one at 0.25%) at the central bank's next meeting on 18 December.
Minneapolis Fed President Neel Kashkari, who said "inflation is headed to the right direction," likely buoyed rate cut sentiment.
What are the experts saying?
Commenting on how the latest US inflation data may impact the Fed's upcoming interest rate decisions and by connection, impact the ASX 200, Lindsay Rosner, head of multi-sector fixed income investing at Goldman Sachs Asset Management, said (quoted by Bloomberg):
Bang in-line core inflation leaves the Fed on track to cut rates in December. After a run of unseasonably hot autumn data, today's number cools fears of an imminent slowdown in the pace of rate cuts.
Barclays economist Pooja Sriram sounded a slightly more cautious note.
"We maintain our call for a 25-basis-point cut at the December FOMC [Federal Open Market Committee] meeting but believe that it could still be a close call, given there will be one more payroll report and CPI report," Sriram said.
But should investors be worried about the pending return of Donald Trump to the White House potentially rekindling inflation?
According to Bloomberg strategist Edward Harrison, not today.
"Any inflation from the future Trump administration's policies won't be felt until well into the future," he said.
The ASX 200 has gained more than 17% over the past year as inflation in the US and Australia have both come off the boil, though Aussie investors are still awaiting the first rate cut from the RBA.
