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Consumer Prices Rise for Second Straight Month

13 October 2017

U.S. Treasury prices gained after the Treasury Department saw strong demand for a sale of 30-year bonds.

The report said the annual rate of growth in consumer prices accelerated to 2.2 percent in September from 1.9 percent in August, while the annual growth in core consumer prices held at 1.7 percent.

CPI rose 0.5% month-over-month in September, according to the Labor Department.

"The move in the dollar index this week is primarily a correction to the big move that we had in September", said Marc Chandler, global head of currency strategy at Brown Brothers Harriman.

Adding to this pressure, sterling jumped to its highest since October 4, with analysts citing a report in Germany's Handelsblatt newspaper that the European Union could offer Britain a two-year transitional Brexit deal.

European shares rose to their highest in almost four months, helped by corporate earnings updates.

The Dow Jones Industrial Average fell 17.09 points, or 0.07 percent, to 22,855.8, the S&P 500 lost 2.1 points, or 0.08 percent, to 2,553.14 and the Nasdaq Composite dropped 2.41 points, or 0.04 percent, to 6,601.14.

Benchmark 10-year notes were last up 7/32 in price to yield 2.3195 percent, from 2.345 percent late on Wednesday.

Stocks on major world markets, however, hit their fourth record high in a row, with Wall Street moving higher as some investors bet the inflation data could curb future rate hikes while others eyed trade discussions and retail data.

The gasoline index increased 13.1% in September, the Bureau said, which accounted for about three-quarters of the seasonally adjusted increase as was likely to have been boosted by the impact of Hurricane Harvey.

Also in currencies, the euro was down 0.15 percent to $1.1839 snapping four straight days of gains after rising to its highest since September 25 earlier in the session. The food index increased 1.2% over the a year ago.

Core prices, which exclude food and energy and are more closely watched by economists and the Federal Reserve, rose by a disappointing 0.1% on the month, short of August's 0.2% increase that was predicted to repeat for a second month.

US crude rose 1.54 percent to $51.38 per barrel and Brent was last at $57.11, up 1.53 percent.

Oil prices firmed on Friday as bullish news from strong Chinese oil imports to turmoil in the Middle East put Brent on track for a almost 2.8 percent weekly gain.

Consumer Prices Rise for Second Straight Month