LOOK AHEAD: US Week Ahead: Retail Sales, PPI & Claims Headline Thanksgiving Week

Barclays sit at the top end of unrounded analyst estimates we've seen for Friday's September CPI release, with core CPI seen at 0.36% M/M and headline at 0.43% M/M. As headlined in an earlier bullet, Goldman form the lower end of this unrounded estimate range with 0.25% M/M. Barclays expect similar strength through to Jan 2026 on elevated tariff pass-through. 

• “September data quality should remain unaffected since collection finished before the shutdown, but prolonged closures may affect October data collection and quality.”
• “We expect the uptick to be led entirely by core goods prices, which we forecast at +0.4% m/m amid more tariff pass-through. If realized, this would mark the highest core goods inflation print since May 2023. We estimate that core services inflation eased to 0.3% m/m, amid less shelter inflation”.
• They eye 0.31% M/M for core PCE inflation, 9bp higher than August.
• “We expect fairly stable but elevated tariff pass-through in the coming months to keep core CPI rounding to 0.4% m/m through January 2026. While tariff pressures have been slow to materialize, they are catching up with the 2018-19 experience, and about 40% of the expected tariff-related price increases have materialized thus far.” They see core CPI at 3.5% Y/Y in Dec 2025 and 2.7% Y/Y in Dec 2026.
• They continue to see a 25bp cut in October before one more in December. “The trickle of pre-shutdown data releases and private data suggest more of the same for the labor market and spending.”

• RES 4: 1.4200 Round number resistance  
• RES 3: 1.4167 50.0% retracement of the Feb 3 - Jun 16 bear leg
• RES 2: 1.4111 High Apr 10
• RES 1: 1.4080 High Oct 16 and the bull trigger
• PRICE: 1.3998 @ 15:47 BST Oct 22
• SUP 1: 1.3976/3900 20- and 50-day EMA values  
• SUP 2: 1.3821 Bull channel base drawn from the Jul 23 low 
• SUP 3: 1.3727 Low Aug 29 and a bear trigger 
• SUP 4: 1.3689 Low Jul 28 

USDCAD has pulled back from its recent highs. The trend condition remains bullish and a move lower is considered corrective. Moving average studies are in a bull-mode position, highlighting a dominant uptrend. Sights are on 1.4111, the Apr 10 high, and further out, scope is seen for an extension towards 1.4167, a Fibonacci retracement. First key support lies at 1.3900, the 50-day EMA. Support at the 20-day EMA lies at 1.3976.     

Goldman Sachs are at the dovish end unrounded analyst estimates we've seen for monthly CPI inflation in Friday's September release, eyeing core CPI at 0.25% M/M after the 0.35% M/M in August and headline CPI at 0.33% M/M. We judge the median unrounded analyst estimate to be at 0.32% M/M for core CPI, with a range of 0.25-0.36%. 

• Four key component-level trends Goldman expect to see in this report:
  • “unchanged used car prices, reflecting the signal from auction prices, and a modest increase in new car prices, reflecting downward pressure on consumer prices from increased dealer incentives.”
  • “a 0.3% increase in the car insurance category based on premiums in our online dataset.”
  • “a 1.5% decline in airfares in September, reflecting a fading boost from seasonal distortions and a decline in underlying airfares based on our equity analysts’ tracking of online price data.”
  • “upward pressure from tariffs on categories that are particularly exposed, such as communication, household furnishings, and recreation, worth +0.07pp on core inflation.”
• “Over the subsequent few months, we expect tariffs to continue to boost monthly inflation and forecast monthly core CPI inflation of around 0.2-0.3%. Aside from tariff effects, we expect underlying trend inflation to fall further, reflecting shrinking contributions from the housing rental and labor markets.” They see core CPI at 3.1% Y/Y in Dec 2025 and core PCE at 3.0% Y/Y (or 2.2% for both excluding tariff effects).