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CHILE: September CPI Inflation Due Tomorrow

CHILE
EM BulletBulletGlobalEmerging Market NewsRegion
  • Attention will be on tomorrow’s September CPI data, which will have relevance for the near-term interest rate outlook, in particular the next BCCh MPC meeting on Oct 17. Consensus is for another 0.3% m/m increase in the CPI in Sept, but for the annual rate of inflation to moderate to 4.4% y/y, from 4.7%.
    • Scotiabank expects the data to show limited inflationary pressures in the absence of an electricity fare increase. They forecast a 0.28% m/m rise in headline CPI and a similar 0.3% increase in ex-volatiles CPI. Food prices, and shelter and housing expenses (reflecting the June/July electricity tariff hikes) will be behind the bulk of the increase in headline CPI. They note that Chilean markets are roughly pricing in a 25bp BCCh rate cut at each of its five next meetings, and it may take a large beat tomorrow, especially in ex-volatiles, for one of these to be reduced closer to toss-up odds.
    • BBVA notes that the first electricity hike is beginning to fade and some lower food and energy prices have also helped, easing the pressures of secondary effects from the utility hikes and likely leaving room for further rate reductions.
    • JPM expects headline inflation to come in at 0.26% m/m, and 4.2% y/y. In their view, that would be consistent with the BCCh easing 25bp in the meetings through year-end.
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  • Attention will be on tomorrow’s September CPI data, which will have relevance for the near-term interest rate outlook, in particular the next BCCh MPC meeting on Oct 17. Consensus is for another 0.3% m/m increase in the CPI in Sept, but for the annual rate of inflation to moderate to 4.4% y/y, from 4.7%.
    • Scotiabank expects the data to show limited inflationary pressures in the absence of an electricity fare increase. They forecast a 0.28% m/m rise in headline CPI and a similar 0.3% increase in ex-volatiles CPI. Food prices, and shelter and housing expenses (reflecting the June/July electricity tariff hikes) will be behind the bulk of the increase in headline CPI. They note that Chilean markets are roughly pricing in a 25bp BCCh rate cut at each of its five next meetings, and it may take a large beat tomorrow, especially in ex-volatiles, for one of these to be reduced closer to toss-up odds.
    • BBVA notes that the first electricity hike is beginning to fade and some lower food and energy prices have also helped, easing the pressures of secondary effects from the utility hikes and likely leaving room for further rate reductions.
    • JPM expects headline inflation to come in at 0.26% m/m, and 4.2% y/y. In their view, that would be consistent with the BCCh easing 25bp in the meetings through year-end.