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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
US OUTLOOK/OPINION
- Released at 0830ET on Friday, Bloomberg consensus sees core PCE inflation at 0.2% M/M but with skew suggesting sizeable risk of a 0.1% print (29 of 48 see 0.2, 19 see 0.1).
- Indeed, the unrounded estimates we’ve seen average 0.15% M/M for July after the 0.18% in June.
- If accurate, it would see a three-month average pace of 0.15% M/M, for further confirmation of a move back to the inflation target after the four months averaging 0.34% M/M through Jan-Apr 2024.
- The six-month rate meanwhile would ease from 3.4% to 2.7% annualized for its softest since January.
- The Y/Y is seen technically increasing a tenth to 2.7% but it’s exaggerated by rounding: a 0.15% M/M increase would see 2.66% after 2.63% in June. Expect increased focus on the six-month rate as the Y/Y is increasingly biased higher into Q4 on base effects.
- Some post CPI and PPI analyst estimates were trimmed after international price data showed downward pressure from net foreign travel prices.
- Analyst estimates for core services ex housing are limited but they expect a broadly similar profile to that for core PCE: Citi look for this “supercore” measure to have increased 0.17% M/M and NWM 0.2% M/M, after two months averaging just 0.184% M/M following the 0.41% M/M averaged in Jan-Apr and 0.18% M/M in Q4.
- Bloomberg consensus sees headline PCE at 0.2% M/M but again with a large risk of a downside surprise with 0.1.
- A note on revisions from Thursday’s second release for Q2 national accounts: any surprises here will alter the monthly profile for core PCE inflation back in Q2 although recent releases have tended to see these backloaded to earlier in respective quarters. That’s not to say it will happen again this time but it’s worth bearing in mind that these initial reactions have been pared recently.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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