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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 DATA
- Headline and core CPI inflation both came in at 0.4% M/M in February, headline rounded down from 0.44% (cons 0.4) vs core rounded up from 0.36% M/M (cons 0.3).
- The main upside came from used car prices surprisingly increasing 0.5% (analyst av -1%, the difference adding ~0.04pps to core CPI vs expectations) and airfares increasing 3.6% (analyst av +1.2%, worth ~0.02pps vs expectations).
- Rents as expected on balance: There wasn’t a major surprise from OER, coming in at the lower end of analyst expectations at 0.44% M/M as it pulled back from the 0.56% in Jan to equal the average pace seen in Q4. Rent of primary residence inflation offset OER being on the lower side, with its 0.46% M/M above any estimate we’d seen and the strongest since Oct.
- Supercore still strong but with softer details: the 0.47% M/M was within the wide range of analyst estimates (0.39-0.62) after a particularly strong 0.85% M/M. However, this is boosted by the above airfares strength whilst we noted earlier weakness is some heavily weighted components.
- Broader core goods as expected: Outside of used vehicles, core goods price developments were largely as expected at 0.06% M/M and mean that the positive overall core goods outturn was not particularly alarming from a disinflationary perspective. This appears consistent with a return to a more neutral setting for global supply chain pressures.
- With those caveats aside, it’s another strong CPI report even if it doesn’t match the strength seen in January. Further, our estimate of dispersion across 57 items over the entire CPI basket saw relatively limited moderation considering the sharp increase in the breadth of inflationary pressure in January.
- Six-month run rates for both core and supercore CPI increased three months to 3.9% and a particularly eye-catching 5.9% annualized. PPI details will be important here for honing PCE estimates, and we expect a continued large wedge between the two, but this CPI report is unlikely to give the FOMC “greater confidence” that inflation is set for a sustainable return to 2%.
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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