Today’s publication by the Great Britain and the United States regarding their level of consumer and producer inflation (CPI and PPI, respectively), and US-based retail sales, had many investors seeking higher yielding assets. The news spurned calls for growth, especially as consumer spending in the US shrank less than forecast.
After digesting the bullish inflation reports, investors now appear to be anticipating tomorrow’s CPI and TIC Long-Term Purchases data out of the US. The inflationary figure is expected to highlight the same solid growth patterns as today’s news, but the long-term purchases investment data is forecast to show a near-doubling of foreign investment in US-based long-term securities.
The report could be highlighting a downturn in US investments overseas, or a shift into US securities by foreigners. Either way, more capital is flowing (or staying) in the US, which should help the USD in the short- to mid-terms.
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