Danske Research previews the US August CPI report due on Friday.

"Friday’s August CPI print will have potentially large market implications. We forecast headline inflation at 0.4% m/m SA, or 3.4% y/y, up from 3.3%, as higher oil prices lifted retail gasoline prices," Danske notes.

'The Fed will focus more on whether underlying inflation continues to trend lower. We expect core inflation at 0.2% m/m SA, or 2.4% y/y, down from 2.5% and in line with consensus. Our forecast includes a small uptick in ‘supercore’ services inflation momentum, which has remained near its pre-pandemic average over recent months. However, for the Fed, an upside surprise in broader services inflation beyond our forecast would be difficult to disregard as just a one-off. Also watch Thursday’s August PPI, which is unusually released before CP, and could therefore carry more market weight than usual," Danske adda.