Consumer prices outside food and energy rose less than expected in September to post their smallest gain in six months, a government report showed on Wednesday, suggesting inflation pressures remained contained.
Housing starts surged in September at their fastest annual pace in 17 months on a big increase in groundbreaking for multi-family units, while permits for future construction fell, a government report showed on Wednesday.
FRED DICKSON, CHIEF MARKET STRATEGIST, D.A. DAVIDSON & CO. LAKE OSWEGO, OREGON
The headline data, it appeared to be pretty much on target. Our response is that we are seeing inflation pressure slowly build up in the economy. While the core rate was only up 0.1 percent, it still has pushed the core level up to 2 percent which is at the top end of the Fed's targeted zone for no action. So the economy has basically strengthened to the point where we are seeing companies pass along inflation increases and at some point the Fed has to take notice of what is happening in terms of inflation.
The housing data is a tough indicator because there was a pleasant surprise. It appeared the number may have jumped up, most likely as a result of weather that could have dampened the housing data in the prior month. The way I'd put it, the housing data combined with CPI data shows that the economy, while it still is muddling along, is showing a little forward momentum that has not generally been anticipated by most analysts.
BORIS SCHLOSSBERG, HEAD OF RESEARCH, GFT FOREX, NEW YORK
The housing starts were strong, which is the first sign of life in housing we've seen in a while. That's welcome. And the CPI is positive for risk, which is helping the euro. But generally, I think this will have very little impact on trade because the focus is still squarely on Europe. The market is coming to the conclusion that they are working on something big and dramatic and the euro is trading accordingly.
RICH ILCZYSZYN, SENIOR MARKET STRATEGIST WITH MF GLOBAL IN CHICAGO
We're still in shock from Apple missing yesterday, but the market recovered somewhat overnight. The CPI numbers are a bit flat, but the market is responding OK. Right now, these numbers are important but are overshadowed by the magnitude of the euro zone issue and the size of the Greek protest.
The housing market remains relatively slow, so bad news, since it isn't worse news, can almost seem like good news.
STOCKS: U.S. stock index futures pare losses.
BONDS: U.S. Treasury debt prices extend losses
FOREX: The dollar extends losses versus euro.