US CPI data due today, 1230 GMT:
snapshot from the ForexLive economic data calendar, access
times in the left-most column are GMT. The
numbers in the right-most column are the ‘prior’ (previous month)
number in the column next to that, where is a number, is the
consensus median expected.
Some relief is the consensus expectations, snippets from analysts:
Société Générale:Seasonally-adjusted gasoline prices are expected to have dropped roughly 5% in April. Home heating and electrical costs should dampen the overall energy price boost to the CPI, but the energy component is key to the 0.2% MoM forecast increase. If this is the case, the YoY measure would fall to 8% from 8.5% in March and raise hopes that the CPI peak pace was set last month. The unknowns regarding energy price pressures linger, however, so we are calling the peak at 8.5%, noting that conviction rests on oil and gas price developments. Core CPI is still expected up 0.4% MoM (5.9% YoY), as rent and shelter components contribute a large share of the index, and they are set for a 0.4% increase.
The US CPI is the key release tonight. Monthly headline inflation is expected to moderate to 0.2% which, combined with more favourable base effects, is expected to see the annual rate decelerate to 8.1% (from 8.5% previously). Core inflation is expected to increase 0.4% on the month (still too high for comfort for the Fed) but, likewise, base effects are expected to see the annual rate drop to 6% y/y.NAB:consensus expecting little change in inflationary pressure. The Core CPI reading is seen at 0.4% m/m, up from the 0.3% print in March taking the yoy reading to 6.0%, down from 6.5% previously. ING:Consumer price inflation should hopefully show inflation has passed the peak with the YoY rate slowing from 8.5% to 8.3%, and core inflation edging down to 6.1% from 6.5%. Lower gasoline prices will be a big help, as will a drop in second-hand car prices as heralded by data from the Mannheim car auctions. However, it will be a long slow descent to get to the 2% target. As such, the Fed will continue to hike rates swiftly with 50bp rate hikes expected in June, July and September.