US: Expect a modest 0.1% increase in core CPI - Nomura

Analysts at Nomura expect a modest 0.1% (0.134%) m-o-m increase in US core CPI in March following a 0.2% (0.182%) m-o-m gain in February.

Key Quotes

“Note that core CPI inflation surprised to the downside in March 2017. Thus, despite the expected weak reading of m-o-m core inflation, base effects will likely help push up the y-o-y rate for March to 2.1% (2.069%), from 1.8% (1.848%) in February. Among core goods, we think apparel prices likely reverted following large gains in January and February.”

“We think CPI food prices likely rebounded from a flat reading in February when we consider incoming data on prices received at farms. However, CPI energy prices likely fell as incoming data indicate retail gasoline, natural gas and heating oil prices trended lower from their levels in February. Put together, our forecast for CPI inflation in March is 0.0% (-0.044%) m-o-m, which would yield 2.4% (2.369%) y-o-y growth. Our forecast for CPI NSA is 249.576.”