On Tuesday we get the October CPI.
Every calendar shows a 3.9% forecast for the yearly number. That number won't even be printed.
Get this one right, and every CPI after it gets way easier to trade. Everything below comes from the economic calendar playbooks and the live rate tracker on MRKT, all pulled on Sunday, November 8.
It works for the dollar, yields, indices and gold, and the same framework carries over to every CPI after this one.
This week's bonus: our CPI e-book and the full Macro e-book, both free when you sign up at mrktedge.ai/challenge
In this playbook:
- Why this CPI matters more than usual
- The weird part about this report
- Where the market sits going in
- The playbook: what each number does
- 4 scenarios and how to trade each one
- The checklist before and after the print
1. Why this CPI matters
- The Fed is hiking again. Rates went up 25bp in September to 4.00%, then held in October. Next decision: December 9.
- Inflation is going the wrong way. September CPI came in at 0.6% for the month and 3.7% for the year, up from 3.4% in August. Gasoline alone was up 34% over the year.
- It's spreading past oil. Core CPI (no food, no energy) rose 0.3% in September and 2.6% on the year, up from 2.4%.
- Jobs are holding up. October payrolls came in at 165K against 65K expected, and unemployment fell to 4.1%. That gives the Fed room to keep hiking.
- The market already leans hard toward December. On the rate tracker the odds of a 25bp hike sit at 77%, with about 22% for no change.
And this is the last CPI the Fed sees before December 9. The next one comes out the day after the decision.
TL;DR: Tuesday decides if the December hike becomes a lock or starts to fade.
2. The weird part: there's no yearly number
In October 2025 the government was shut down and prices were never collected. Without October 2025 there's nothing to compare October 2026 with, so on Tuesday the yearly rate for headline and core won't be published.
The 3.9% and 2.8% you see on calendars are estimates against September 2025. Good as context, but the market will trade the monthly numbers.
What actually prints on Tuesday:
- CPI month on month: forecast 0.3% (last month 0.6%)
- Core CPI month on month: forecast 0.2% (last month 0.3%)
TL;DR: forget the yearly headline this time. Core month on month is the number that moves everything.
3. Where the market sits going in
The market walks into this print already leaning hawkish. Payrolls beat by 100K, the Fed hiked two months ago, and a December hike sits at 77% odds.
Oil is the wild card. Tension in the Gulf keeps energy prices, and energy inflation, in focus.
So a hot print adds to a story the market already believes. A cool print forces a real repricing, and that's the outcome the market is least ready for.
TL;DR: the bar for a hawkish surprise is high, the bar for a dovish one is low.
4. The playbook: what each number does
This is the economic calendar playbook on MRKT, for the dollar (USD).
Core CPI month on month (the main one):
- 0.4% or higher: very bullish dollar
- 0.3%: bullish dollar
- 0.2% (the forecast): ranging
- 0.1%: bearish dollar
- 0.0% or lower: very bearish dollar
Headline CPI month on month:
- 0.5% or higher: very bullish dollar
- 0.4%: bullish dollar
- 0.3% (the forecast): ranging
- 0.2% or lower: very bearish dollar
CPI prints with one decimal, so on core it pretty much comes down to three outcomes: 0.1, 0.2 or 0.3.
How it spreads from the dollar to everything else:
- Hot inflation: more hikes, so yields go up and the dollar gets stronger. Stocks (the Nasdaq most of all) and gold usually come under pressure.
- Cool inflation: fewer hikes, so yields and the dollar drop. Stocks and gold usually catch a bid.
TL;DR: hot core and the dollar runs, cool core and everything against the dollar gets relief, in line and it chops.
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5. The 4 scenarios and how to trade them
Scenario 1: everything hot (core 0.3%, headline 0.4% or more)
The December hike becomes pretty much a lock and the market starts looking at a second one. Dollar and yields up, stocks and gold under pressure. Let the first spike settle, then trade the pullback in the direction of the move into the New York session.
Scenario 2: hot headline, core in line (core 0.2%, headline 0.4% or more)
This is the oil story again. The first candle can run hard and then reverse, because the Fed watches core more closely. Stay out of the first move and let core decide.
Scenario 3: in line (core 0.2%, headline 0.3%)
The playbook says ranging. December odds stay close to 77%. Expect fake outs on both sides first. No trade until price breaks the London range.
Scenario 4: cool (core 0.1%, headline 0.2%)
The market starts to reprice the December hike lower. Dollar and yields down, stocks and gold up. Since the market leans hawkish going in, this move can be fast, so the pullback after the first spike is the cleaner entry.
One more thing: September can get revised. A revision can make the move bigger or cancel it out, so always read last month's number too.
6. The checklist
Before the print:
- Monday: NY Fed 1-year inflation expectations (last one was 3.9%)
- Tuesday morning: check the December hike odds on the rate tracker (77% going in)
- Mark the Asian and London highs and lows on what you trade
- No open position into the release
After the print:
- Read core month on month first, headline second
- Check the September revision
- Wait for the first 5-minute candle to close
- Check the hike odds again. A big jump backs the move. If they barely moved, treat the spike as a possible fake out
- Only trade in the direction the playbook gave
Go deeper on CPI
This article is the playbook for Tuesday. If you want to go deeper, this week's bonus is our CPI e-book: what to expect before the print and every possible outcome. You also get the full Macro e-book with it.
Grab both here: mrktedge.ai/challenge
It's the sign-up for our free News Trader Workshop on November 18, so you also get a seat to learn how to trade CPI, NFP and the Fed live.
That's the full CPI playbook. We break down every big release this way. Next one: the December 9 Fed decision.