US CPI preview: 2.1% increase on a 12-month basis - Nomura

Analysts at Nomura explained that they expect a strong rebound of 0.3% (0.271%) m-o-m in core CPI in December following a disappointing reading of 0.117% in the previous month. 

Key Quotes:

"November’s core CPI reading was partially dragged down by an unusually large decline in apparel prices, which we expect to revert in December (Figure 2). Moreover, physicians’ services prices will also likely increase notably in December after an outsized decline in November. The strong m-o-m increase in December’s core CPI will likely push up the y-o-y rate to 1.8% (1.759%) in December, from 1.7% in November."

"Overall, we expect a 0.171% m-o-m increase in topline CPI for December, resulting in a 2.1% increase on a 12-month basis. Our forecast for CPI NSA is 246.539. "