Equilon FXThe expectation
gap.
The same release can carry different information depending on what was expected.
+0.20 pp
Reported inflation is 0.20 percentage points above the expectation.
This measures a difference in information. It does not predict a currency response.
The baseline changes the story
The surprise is the reported value minus the expected value, measured in percentage points. Hold the reported value at 3.2% and move the expectation from 3.0% to 3.4%: the same reported inflation rate changes from an upside to a downside surprise.
A distribution is richer than a single number
This example uses one invented expectation. Actual forecasts vary across participants, and a published consensus is a summary of that distribution. Timing, revisions, release composition and positioning can all affect interpretation.
For an institutional explanation of expectations and communication, see the ECB’s introduction to forward guidance.