Analysts forecast headline August...>

US DATA PREVIEW: Analysts forecast headline August CPI at +0.3%, with core CPI

at +0.2%. In the past few months, headline and core CPI have been overestimated,

as has been the case in recent August reports, with the exception of August

2016. The forecasted upswing in headline CPI is expected to be driven by a boost

in energy prices from Harvey, but analysts say that the brunt of Harvey's impact

will come in September. If core CPI comes in at the expected 0.2% gain, it will

be the largest increase in six months, but the year/year rate should actually

pull back further due to a strong 0.3% core gain in August 2016. A rebound for

core CPI is seen as critical to the FOMC's decision on December rate hike.

However, it may prove difficult for bond markets to absorb, as they have already

priced low odds on a December hike due to the devastating hurricane impacts.