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MNI CPI Preview: Core Services Ex Shelter Keenly Watched

US
  • 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.
  • 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.
Full report including MNI analysis and previews from fifteen sellside analysts: https://marketnews.com/markets/pdfs/mni-us-cpi-preview-core-services-ex-shelter-keenly-watched

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