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April CPI Inflation Due Tomorrow

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  • April CPI inflation data will be released tomorrow, with analysts expecting the headline rate to fall back into the 1-3% target range at 2.72% y/y, from 3.05% previously. In m/m terms, prices are expected to rise by 0.25%, following a 1.01% gain in March.
  • Scotiabank note that the key prices they track point to a monthly inflation of just under 0.2%. If so, yearly inflation should fall decisively to around 2.7%. In their view, the BCRP is mostly focused on inflation, even more than interest rates differentials with the Fed. If inflation falls below the 3.0% ceiling, this would give the BCRP plenty of room to reduce its reference rate from 6.00% to 5.75% on May 9, despite uncertainty regarding the Fed rate.
  • JP Morgan also expect inflation to move back within the target range, printing 2.75% y/y. In contrast, however, their base case is still for a pause for BCRP in May, with the central bank resuming its easing cycle in June with a 25bp cut.
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  • April CPI inflation data will be released tomorrow, with analysts expecting the headline rate to fall back into the 1-3% target range at 2.72% y/y, from 3.05% previously. In m/m terms, prices are expected to rise by 0.25%, following a 1.01% gain in March.
  • Scotiabank note that the key prices they track point to a monthly inflation of just under 0.2%. If so, yearly inflation should fall decisively to around 2.7%. In their view, the BCRP is mostly focused on inflation, even more than interest rates differentials with the Fed. If inflation falls below the 3.0% ceiling, this would give the BCRP plenty of room to reduce its reference rate from 6.00% to 5.75% on May 9, despite uncertainty regarding the Fed rate.
  • JP Morgan also expect inflation to move back within the target range, printing 2.75% y/y. In contrast, however, their base case is still for a pause for BCRP in May, with the central bank resuming its easing cycle in June with a 25bp cut.