The NY Fed’s consumer inflation expectations and the French confidence vote are important events today. The European session is quiet, which may lead to a pause in the markets as they prepare for the upcoming US CPI report or continue last week’s trends.

US Inflation Expectations

In the US session, attention will be on the NY Fed’s consumer inflation expectations data. This data is part of three major surveys, which also include the University of Michigan and the Conference Board. Although this survey might not drastically affect the markets, it provides valuable insights into inflation expectations. It’s considered trustworthy due to its large participant base and steady methodology, even though it comes out later than the others. Meanwhile, the French confidence vote may lead to Prime Minister Bayrou losing his position, which could prompt President Macron to choose a new Prime Minister. Any market reactions to this news are expected to be minor, likely resulting in only short-lived fluctuations.

Market Trends and Expectations

With the market in a wait-and-see mode, we might experience consolidation ahead of the crucial US CPI report later this week. Last week’s slight risk-off sentiment may continue, as traders prepare for this significant data point. This calm beginning to the week is a good time for positioning rather than reacting to fresh information. The spotlight is still on US inflation and its implications for the Federal Reserve’s policy. The last core CPI reading in August 2025 was a stubborn 3.1%, leading the market to assign a 65% chance of another rate hold at the next meeting. Traders are buying options on the S&P 500, anticipating a big price movement once the new inflation number is released. Today’s NY Fed inflation expectations survey will provide a small indication, but it’s unlikely to be a major driver of change. The previous report showed one-year expectations dipping to 2.9%, marking the first time this number fell below 3% since early 2024. We’ll be watching to see if this downward trend continues. A surprising increase in this figure could lead to a quick sell-off in short-term bond futures. Over in France, the confidence vote is mainly background noise that’s already priced into the assets. The spread between French and German 10-year bonds has remained steady at around 65 basis points for weeks, suggesting the market has adjusted to the political uncertainty that started with the 2024 snap elections. Any unexpected developments could cause temporary volatility in the euro, but it shouldn’t change the larger picture for derivative traders. Create your live VT Markets account and start trading now.

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