US inflation continues to soften

US core CPI was slightly stronger than expected, rising 0.2% m/m. Core services, boosted by another strong contribution from shelter, rose at a solid 0.3% m/m pace in September.  

Core goods prices were flat on the month, slightly stronger than expected. Shelter inflation accelerated further in September, with rents increasing 3.7% y/y. 

"Rents are expected to continue to rise as ongoing strength in domestic activity puts upward pressure on the housing sector. In contrast, core goods prices are expected to fall further as the strong dollar and weakness abroad hold down import prices", says Barclays.