18 Jun 2014
US CPI keeps trending higher – Danske Bank
FXStreet (Edinburgh) - Sverre Holbek, Senior Analyst at Danske Bank, remarks the upside trend of the US consumer prices gauged by the CPI.
Key Quotes
“Upside surprise in CPI data the focal point in quiet US session”.
“In a relatively quiet US session, worries over a potential sectarian civil war in Iraq were overshadowed by the latest data on US retail inflation”.
“The report showed headline inflation rising to 2.1% y/y, while the core measure rose to 2.0% y/y, driven mainly by the service sector. While the trend higher in inflation may not come as a surprise, given the fading impact of the decline in food prices and slowdown in EM growth, the pace of increase is greater than anticipated with yesterday’s release marking the third consecutive upside surprise”.
“The upside surprise clearly puts more focus on tonight’s Fed press conference, where the risk of a hawkish tilt has arguably increased”.
“Worth mentioning is also the data on US housing released yesterday, which came out relatively soft (permits down 6.4%, starts 6.5%). However, it should probably be seen in the light of last month’s strong figure”.
Key Quotes
“Upside surprise in CPI data the focal point in quiet US session”.
“In a relatively quiet US session, worries over a potential sectarian civil war in Iraq were overshadowed by the latest data on US retail inflation”.
“The report showed headline inflation rising to 2.1% y/y, while the core measure rose to 2.0% y/y, driven mainly by the service sector. While the trend higher in inflation may not come as a surprise, given the fading impact of the decline in food prices and slowdown in EM growth, the pace of increase is greater than anticipated with yesterday’s release marking the third consecutive upside surprise”.
“The upside surprise clearly puts more focus on tonight’s Fed press conference, where the risk of a hawkish tilt has arguably increased”.
“Worth mentioning is also the data on US housing released yesterday, which came out relatively soft (permits down 6.4%, starts 6.5%). However, it should probably be seen in the light of last month’s strong figure”.