Rise and shine everyone.
It’s CPI day again for the US, and the debate is on whether we will see the first signs of the US tariffs hit the inflation print. So far, the estimates seem to suggest that we may see some increase in the core inflation print, but not so much in the headline print.
This makes sense, particularly when you look at oil prices. Energy prices have been the biggest deflationary force during the last two CPI prints. Here’s last month’s breakdown:
Grocery prices, Used Cars, and Apparel are looking good. What’s not looking good is shelter prices. Hotel prices are still deflationary, so rents are what’s driving prices up. If we zoom out, and look at a year-on-year comparison, we do see progress and that ties in with what we’re seeing in other measures of rent as well.
Today, we also have the 10Y UST note auction, and tomorrow, we have the 30Y UST bond auction. These are interesting because we do want to see the demand coming through, given the fiscal concerns and the fact that the US is no longer AAA-rated. Yesterday’s 3-year auction was disappointing.
Tonight, we also have earnings from Oracle.
Calendars
(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)