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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.
EXECUTIVE SUMMARY
- Core CPI inflation is seen nudging up to 0.3% M/M in December after surprising lower with 0.20% in November when the three main areas of core - shelter, services ex shelter and goods - all moderated.
- OER and tenants’ rents could see a modest dip but barring no surprises there, attention is likely most firmly on core services excluding shelter with its continued FOMC focus, and then any further goods deflation.
- Market expectations have tilted closer to another stepdown to a 25bp hike on Feb 1 (31bp priced) on softer than expected AHE growth within payrolls and a significant miss for ISM services as new orders slumped.
- We see high sensitivity to surprises in either direction, especially if in stickier, less idiosyncratic categories.
- The historically low u/e rate gives hawks something to build upon if an upside surprise, but might need to be followed by strong composition-adjusted wage growth in measures released later this month to lock in another 50bp hike, whilst a downside surprise could further cement a 25bp hike with a resulting relief rally.
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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.
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