ABNAmro, Commerzbank Still See 75bp Fed Hike In July

Commerzbank says regarding June's upside inflation surprise that "a look at the details is thus almost superfluous – ultimately, prices are rising strongly everywhere, both for services and for goods". They don't think inflation has peaked, and thus "the Fed still has some work to do".

• That will include a 75bp hike in July as a "done deal".

ABNAmro sees monthly headline inflation as "likely to fall back in the near term given the decline in a range of commodity prices, but the risks to core inflation look still to be to the upside, despite the cooling in demand indicators."

• Importantly they think the broader decline in commodity prices will both downwardly pressure headline inflation and "reduce the risk of expectations becoming unanchored".
• They continue to see the Fed hiking by 75bp in July, followed by 50bp in each of Sep and Nov, with 25bp in Dec and Feb.