Written Commentary
US CPI tops busy schedule of data and events; digesting hawkish RBI hold, UK RICS drop, mixed Norway inflation, poor Sweden activity metrics; US jobless claims, OPEC and Brazil Ag S&D reports, busy run of corporate earnings, US 30-yr sale ahead
US CPI: utility prices to push headline y/y higher, offset by falling goods prices; housing to pressure core CPI, focus on Services
EVENTS PREVIEW
US CPI will be the focal point on a much busier day for data and events. There are the UK RICS House Price Balance (at lowest level since the GFC), Norwegian CPI (headline below forecast, but core as expected and still very high) and Swedish monthly activity indicators (broad based weakness), and an as expected hawkish hold from India’s RBI to digest, while ahead the US also has weekly jobless claims and Treasury Budget, and expected no change rate decisions in Mexico and Serbia, with a couple of Fed speakers thrown in for good measure. A busy day for monthly reports in the energy and commodity space, with OPEC on the oil market outlook, Brazil’s Conab on grains S&D and Unica on Sugar output, to accompany the EIA’s weekly NatGas Inventories. A bumper day for corporate earnings reports has Alibaba, AMP, China Mobile, LG,, Rakuten and Tokyo Electron as highlights in Asia; Allianz, Deutsche Telekom, Hapag-Lloyd, Orsted, Rheinmetall, RWE and Wienerbeger in Europe, while North America eyes Ralph Lauren, US Foods, Wheaton Previous Metals and Yeti.
** U.S.A. – July CPI **
CPI is seen up just 0.2% m/m on both headline and core, though there are some upside risks for energy from utility prices (electricity & gas), which may off a flattish trend in core Goods prices. Adverse base effects are set to push headline up to 3.3% y/y from 3.0% (and this will likely persist in coming months), while services is likely to continue to keep core CPI elevated at an unchanged 4.8%, even if housing (OER) pressures are easing somewhat. The uptick in headline inflation will not be of particular concern to the Fed, unless renewed energy price rises prove to be a persistent trend, and it will want to see core CPI ex-Housing come down a lot further.
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