CZECHIA: Strong Q3 GDP Report Supports Expectations Of Rate Stability

Looking a bit closer at this morning's German state level September CPI data, an energy acceleration to around -0.7% Y/Y (from -2.4% in August) stands out, bringing overall goods inflation to around 1.5-1.6% Y/Y (1.3% prior). Also services looks firmer than previously this time, at around 3.3% Y/Y (3.1% prior). 

• Food inflation appears to have tapered off a little, to around 2.9% Y/Y in September (incl. non-alcoholic beverages, vs 3.2% prior).
• Within the services-heavy subcategories, the largest magnitude of change will likely be in education, we see the category around 3.9% Y/Y (from 5.1% prior, but note its low weighting in the CPI basket). Restaurants and hotels meanwhile seem to have accelerated, to around 3.9% - 4.0% (3.6% prior). Restaurants will see a VAT decrease in January in Germany.
• The mixed-weighting transport category meanwhile also accelerated, that comes on the back of the mentioned energy acceleration which is driven by base effects. We see transport at around 2.5% Y/Y in September (vs 1.4% prior).

• US Data/Speaker Calendar (prior, estimate)
• 09/30 0900 Boston Fed Collins Council on Foreign Relations
• 09/30 0900 FHFA House Price Index MoM (-0.2%, -0.2%)
• 09/30 0900 S&P Cotality CS 20-City MoM (-0.25%, -0.20%), YoY (2.14%, 1.55%)
• 09/30 0945 MNI Chicago PMI (41.5, 43.3)
• 09/30 1000 JOLTS Job Openings (7.181M, 7.200M), Rate (4.3%, 4.2%)
• 09/30 1000 JOLTS Quits Level (3.208M, 3.165M), Rate (2.0%, --)
• 09/30 1000 JOLTS Layoffs Level (1.808M, 1.827M), Rate (1.1%, --)
• 09/30 1000 Conf. Board Consumer Confidence (97.4, 96.0)
• 09/30 1030 Dallas Fed Services Activity (6.8, --)
• 09/30 1130 US Tsy $85B 6W & $50B 52W bill auctions
• 09/30 1330 Chicago Fed Goolsbee Participates in a Q&A at Midwest Agriculture Co
• 09/30 1530 Chicago Fed Goolsbee on Fox Business
• 09/30 1910 Dallas Fed Logan moderated discussion
• Source: Bloomberg Finance L.P. / MNI 

• On the commodity front, the trend condition in Gold is unchanged and a bull cycle remains in play. The yellow metal has started the week on a bullish note, trading to a fresh cycle high. This confirms a resumption of the primary uptrend. Note that MA studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on $3909.4, a 2.00 projection of the May 15 - Jun 16 - 30 price swing. On the downside, support to watch lies at $3646.3, the 20-day EMA. A pullback would be considered corrective.
• In the oil space, WTI futures have pulled back from their latest gains. The contract has recently breached $65.43, the Sep 2 high and this has potentially improved the S/T condition for bulls. However, the next key resistance is at $68.43, the Jul 30 high, where a break is required to signal scope for a stronger recovery. For bears, a clear reversal lower would refocus attention on key support at $60.85, the Aug 13 low. A break of this level would reinstate the downtrend.