- GBP/USD pulled into the middle on Monday as markets quiet back down.
- Near-term volatility spikes have given way to easy waters.
- Key UK and US inflation data lie ahead in the middle of the week.
GBP/USD continued to flatten out on Monday, trading in place and testing key technical levels as markets buckle down for the wait to a midweek inflation data outing. Recent volatility that saw Cable drop back to long-run averages below 1.2700 have eased into the background for now, and investors will be pivoting to face a round of key inflation prints on both sides of the Atlantic due in the midweek.
US Producer Price Index (PPI) business-level inflation figures are due on Tuesday. The forecast indicates a decrease in core PPI to 2.7% from 3.0%. On Wednesday, YoY core CPI inflation is expected to drop to 3.2% from 3.3%. Market sentiment relies on a balanced inflation outcome for equities to perform well.
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