CPI Preview: Volatile Inputs Could Have Impact (2/2)

Analysts' range for Feb M/M core prices is +0.1% to +0.3% M(+0.2% median); Deutsche and Citi are toward the bottom end:

• Deutsche sees "largely expect a repeat of the January release with energy prices elevating headline (+0.35% unrounded vs.0.26% previously) over a relatively soft core (+0.09% vs. 0.03%)." The "was more of a general phenomenon and not a function of outlier categories." They also note "the inclement weather last month has the potential to induce some volatility into the print, particularly with respect to energy" so figures could be higher than they expect.
• Citi sees +0.12% core: "Note that still-soft price increases for key components such as shelter prices will keep underlying core price inflation...However, there are notable, but hard-to-forecast, upside risks to monthly readings from a potentially quick rise in prices for services such air travel or hotels"

On the higher side of expectations, Barclays is slightly above consensus on headline (+0.5% M/M vs 0.4% expected), though in line on core (+0.2%).

• They "look for some of the firmness in input costs" seen in the Feb ISM manufacturing report to show up in the data. That said, their core reading is not as elevated as they see "positive momentum in core goods as offset by sluggish services inflation"