December Fed and ECB hikes look increasingly likely with core inflation sticky. Core CPI rose 0.2pp to 2.6% and core PCE sits near 3%, little sustained progress toward target. The dollar's sharp rever

What happened: Persistent core inflation is strengthening the case for further tightening by both the Fed and the ECB, with December seen as the more likely timing for the next rate increases. Key numbers: US core CPI rose 0.2 percentage points to 2.6% annually; core PCE remains near 3%; EUR/USD fell close to 1.11 then rebounded above 1.12. Why it matters: The swift reversal of the dollar's gains may suggest future rate hikes are largely priced in, and EUR/USD may depend on differences in the expected scale of tightening.

Persistent core inflation is strengthening the case for further tightening by both the Fed and the ECB, with December seen as the more likely timing for the next rate increases.

The swift reversal of the dollar's gains may suggest future rate hikes are largely priced in, and EUR/USD may depend on differences in the expected scale of tightening.