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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 OUTLOOK/OPINION
- Services drove the downside surprise in June core CPI inflation, with both housing and non-housing components playing a significant role.
- The second mildly negative reading in non-housing inflation was helped by some CPI-specific factors that didn’t translate to core PCE but the typical persistence of housing inflation made its surprise lower all the more notable.
- Analysts appears to expect the bulk of June’s moderation to stick, with an average of estimates we have seen so far of 0.31% M/M for both owners’ equivalent rents (OER) and 0.32% M/M for primary rents.
- Note however that there is a risk of an upside surprise here as the OER data in particular has seen some noise recently owing to specific sampling, especially with the January spike in OER that proved to not be the start of a new trend.
- That said, should the above be realized, it would be a marginal firming from the 0.28% and 0.26% seen in June respectively but it would still leave monthly close to the average rates seen through 2019.
- As such, it would give further confidence that we’ve seen the long-awaited latest moderation in rental inflation as CPI rental series catch up with prior cooling in new lease rates.
- On the latter, latest experimental data from the BLS’s New Tenants Rent index has slowed to -1.1% Y/Y for Q2 but we have to stress that it is particularly prone to revisions and latest quarters have tended to be revised up (Q1 is currently seen at 2.3% vs its first released 0.4%, Q4 is currently seen at 2.8% vs 0.9% and before that -4.7%).
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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