May PPI Expected to Rise; Core......>

US DATA PREVIEW: May PPI Expected to Rise; Core Measures Falling

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-Thursday's May PPI data is expected to show 0.1% growth in headline PPI

alongside -0.1% drops in both core PPI and core PPI ex-trade. The drop would

mark the second straight month of declines for core PPI and the fourth

consecutive month of contraction in core PPI less trade.

-The ISM Manufacturing survey showed U.S. factory prices remaining in

contractionary territory in May as raw materials prices fell for the fourth

straight month, though at a slower pace than April. ISM said these prices were

the lowest since February 2016.

-This morning's CPI report showed both headline and core CPI down -0.1% as the

demand shock caused by Covid-19 and social-distancing measures continues to

exert disinflationary pressure on the U.S. economy. JPMorgan said it expects

"downward pressure on inflation overtime" due to the economic weakness but said

the U.S. likely already saw the biggest declines in March and April.