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CIBC Remain At Hawkish End Of Spectrum Ahead Of CPI

US OUTLOOK/OPINION
  • CIBC are in a minority of analysts looking for another hike from the FOMC next month, and indeed market pricing is just +4bp.
  • On Friday's payrolls report, they noted signs that the labor market is coming into better balance but saw the drop in the unemployment rate and solid wage growth keeping that existing view on track.
  • Looking ahead to Thursday's CPI release, they see core CPI at 0.2% M/M in line with consensus.
  • They will focus on core services ex rent of shelter, noting that last month's flat reading reflected a sizable drop in airfares that may not have extended into July, although even a 0.3% M/M print would leave the 3-month rate at a tame 2.1% annualized.

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