An inflation release shows 0.3% for the month and 3.0% for the year. A headline says prices have cooled. Neither figure, by itself, tells you whether the release was a surprise.
Before interpreting a currency move, establish what was measured, how the number is adjusted and what the market was comparing it with.
Start with the period and the unit
A monthly change compares one month with the previous month. An annual change compares the latest month with the same month a year earlier. They answer different questions and can move in different directions.
Seasonal adjustment attempts to remove recurring calendar patterns. A seasonally adjusted monthly figure should not be treated as directly interchangeable with an unadjusted one. Read the table headings before copying a number into a market note.
Separate the headline from the underlying detail
Headline CPI includes the full measured basket. A core measure excludes specified volatile categories, commonly food and energy, to help examine other price pressures. Neither is the single true inflation number. A sharp fuel move can matter greatly to household bills even when a core measure changes little.
Look for the components that explain the movement. Was the rise concentrated in energy? Did shelter or services also accelerate? A broad change and a narrow one can create different questions for policymakers.
Check the comparison, including revisions
The previous reading tells you the recent path. A consensus estimate tells you what a particular survey expected. Those are not the same benchmark. A figure can be higher than the previous month while still falling below a survey's forecast.
If you quote consensus, record the survey provider and the time the estimate was collected. Do not label a number a surprise merely because it differs from the previous release.
Some economic series are routinely revised. Compare the latest reading with the revised prior period when the release supplies it, and make the revision explicit. CPI revision practices also differ across its seasonally adjusted and unadjusted series; the release notes explain the distinction.
Keep the market reaction separate from the data
The release establishes a fact about a measured period. A claim that the dollar rose because of it requires a timestamped market observation and a defensible connection. Other news may arrive at the same time.
If you have no reliable quote feed, you can discuss the policy implications without inventing a price move. Use conditional language for scenarios: a broader inflation acceleration could complicate easing, for example, rather than asserting what a central bank will do.
A short release note you can reuse
Write the release date, reporting period, actual reading, revised previous reading and a sourced consensus if available. Add the component that explains the biggest change. Finish with the next question, not an automatic buy or sell instruction.
That note is small enough to finish while the information is fresh and specific enough to review later. It also keeps a dramatic chart candle from becoming your only record of what the release actually said.
References & further reading
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