FED: Beige Book: Inflation Pressures Picking Back Up Again After Softer Summer
Below is MNI's summary of the description of inflation in the October Beige Book across districts, with historical comments for context.
- This was arguably the most inflationary Beige Book of 2025, certainly joint with June which saw 8 (of 12) districts characterize inflation pressures as "moderate".
- After June, pressures eased off in the subsequent two Beige Books. But in October's, 7 saw inflation as "moderate" (Boston, Philadelphia, Richmond, Atlanta, Chicago, St Louis, Kansas City) with 1 (Cleveland) reporting "robust" price pressures.
- Tariff pressures on prices were relatively similar to the prior report's, with passthrough impacts varied.
- The national-level description of inflation: "Prices rose further during the reporting period. Several District reports indicated that input costs increased at a faster pace due to higher import costs and the higher cost of services such as insurance, health care, and technology solutions. Tariff-induced input cost increases were reported across many Districts, but the extent of those higher costs passing through to final prices varied. Some firms facing tariff-induced cost pressures kept their selling prices largely unchanged to preserve market share and in response to pushback from price-sensitive clients. However, there were also reports of firms in manufacturing and retail trades fully passing higher import costs along to their customers. Waning demand in some markets reportedly pushed prices down for some materials, such as steel in the Sixth District and lumber in the Twelfth District."
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EURGBP TECHS: Trading Above Support
- RES 4: 0.8769 High Jul 28 and the bull trigger
- RES 3: 0.8744 High Aug 7
- RES 2: 0.8728 76.4% retracement of the Jul 28 - Aug 14 bear leg
- RES 1: 0.8687/8713 High Sep 5 / 2
- PRICE: 0.8651 @ 19:45 BST Sep 15
- SUP 1: 0.8637/8597 50-day EMA / Low Aug 14 and the bear trigger
- SUP 2: 0.8562 50.0% retracement May 29 - Jul 28 upleg
- SUP 3: 0.8540 Low Jun 30
- SUP 4: 0.8514 61.8% retracement May 29 - Jul 28 upleg
The latest pullback in EURGBP appears corrective. Support to watch lies at 0.8597, the Aug 14 low. Clearance of this level would cancel a bull theme and reinstate a recent bearish threat. For bulls, a resumption of gains would open 0.8744, the Aug 7 high. Key resistance and the bull trigger is at 0.8769, the Jul 28 high. Note that moving average studies remain in a bull-mode position. This highlights a dominant uptrend.
GBPUSD TECHS: Bullish Extension
- RES 4: 1.3753 High Jul 2
- RES 3: 1.3681 High Jul 4
- RES 2: 1.3636 76.4% retracement of the Jul 1 - Aug 1 downleg
- RES 1: 1.3620 High Sep 15
- PRICE: 1.3605 @ 19:30 BST Sep 15
- SUP 1: 1.3475/3333 50-day EMA / Low Sep 3
- SUP 2: 1.3315 61.8% retracement of the Aug 1 - 14 bull leg
- SUP 3: 1.3249 76.4% retracement of the Aug 1 - 14 bull leg
- SUP 4: 1.3142 Low Aug 1 and a key support
A bullish theme in GBPUSD remains intact and price traded higher Monday. The pair has pierced resistance at 1.3595, the Aug 14 high and a bull trigger. A clear break of it would strengthen bullish conditions and open 1.3636, a Fibonacci projection. Initial support to watch is 1.3475, the 50-day EMA. A clear breach of the EMA would highlight a potential reversal and signal scope for a deeper retracement.
US 10YR FUTURE TECHS: (Z5) Bullish Trend Sequence
- RES 4: 114-10 High Apr 7 (cont.)
- RES 3: 114-07 1.0% 10-dma envelope
- RES 2: 114-00 Round number resistance
- RES 1: 113-29 High Sep 5
- PRICE: 113-15 @ 19:11 BST Sep 15
- SUP 1: 112-23+ 20-day EMA
- SUP 2: 112-02 50-day EMA
- SUP 3: 111-13+ Low Aug 18 and a key support
- SUP 4: 110-25 Low Aug 1
Treasury futures rallied to a fresh cycle high last Thursday, strengthening current bullish conditions. Note that the recent impulsive rally highlights an acceleration of the uptrend. Also, moving average studies are in a bull-mode position, highlighting a dominant uptrend. This suggests scope for an extension through 114-00 next and a test of 114-10, the Apr 7 high (cont). Initial firm support to watch is 112-23+, the 20-day EMA.
