Gold Prices Fall Amid Rate Jitters; Copper Steady as China Stimulus Eyed 
The US Treasuries is likely to snap previous session gains Friday as the United States consumer inflation climbed during the month of August, strengthening the case for a December interest rate hike by the Federal Reserve.
The yield on the benchmark 10-year Treasury note fell 1-1/2 basis points to 1.687 percent by 12:50 GMT.
The August U.S. consumer inflation report revealed a +0.2 percent m/m reading (+1.1 percent y/y), versus the unrevised unchanged m/m (+0.8 percent y/y) result that occurred in July, above expectations for a +0.1 percent m/m result. Meanwhile, core CPI came in +0.3 percent m/m (+2.3 percent y/y) in August, largest m/m increase since February, versus the unrevised +0.1 percent m/m (+2.2 percent y/y) reading seen in July, above expectations for a +0.2 percent m/m increase.
Overall, the headline found upward pressure from an increase in owners' equivalent rent (+0.3 percent m/m), alongside an unchanged m/m result from energy prices. Despite the overall dampness seen in recent months, we expect a gradual pick-up in inflation readings will be seen in the months ahead (as suggested by headline y/y gains). However, we are unlikely to see a substantial move towards the Fed's 2 percent objective until we see greater traction from wage pressures.
Next week’s FOMC meeting is set to be interesting given the recent divergent Fed speak. The dovish view appears to be in the ascendency for now. We expect no change in policy. The Fed is extending its forecasts out to 2019. We expect there to be a flattening in the Fed’s median ‘dot plot’ with just one hike for this year and two hikes per year (compared to three in the June forecasts).
Meanwhile, the S&P 500 Futures traded 4 points lower at 2,134 by 12:50 GMT.
