The 0.1% July CPI headline and core price gains both slightly undershot estimates, with a 0.1% energy price downtick instead of an expected small uptick, a 0.2% food price rise, and additional core price declines of 0.5% for new vehicles that left a sixth consecutive drop, and of 0.1% for tobacco. The headline figures rounded from lean gains of 0.106% for CPI and 0.114% for the core. We expect a 0.2% August headline CPI rise with a 0.1% core increase with a lift from gasoline. The headline y/y increase should rise to 1.8% from 1.7% in July and 1.6% in June, but a higher 1.9% in May, while the “core” y/y rise slides to 1.6% from 1.7% over the three months ending in July. We expect 0.1% headline and core PCE chain price gains that match today’s CPI data. We expect a 0.4% July nominal consumption rise with a 0.3% “real” increase, with an expected lift from an assumed 0.4% July retail sales rise with a 0.3% ex-auto gain. Our 3.3% Q3 GDP growth forecast after an assumed trimming in Q2 growth to 2.3% from 2.6% includes “real” consumption growth of 2.3% (was 2.2%) in Q3 after 2.8% growth in Q2.
The dollar slid lower following the July CPI figures, which were light of expectations, as were Thursday’s PPI outcome. EURUSD recovered some losses seen since US NFP by surging to 1.1818 from 1.1765, however it seems to getting lower after the data. Meanwhile USDJPY slumped to 108.74, a nearly four-month low, from near 109.20. Equity futures turned modest losses into modest gains, while yields pulled back. The data are another strike against another rate hike this year.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission