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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
- Consensus sees core CPI at 0.2% M/M in August after a slightly softer than expected 0.165% M/M in July.
- MNI’s survey of analysts, including multiple unrounded estimates, suggests it is firmly centered at 0.20%.
- Headline CPI is primed for a ‘low’ 0.2% M/M reading but note an almost even split between 2.5/2.6% Y/Y reading which could easily drive what appears a beat for the 2.5 Bloomberg consensus.
- We expect rental inflation and especially the smaller weighted primary tenants’ rent category to play a particularly big role this month, with analysts looking for an almost full reversal of last month’s surprise strength. We feel there could be some upside risk here.
- Analyst estimates look for CPI core services ex-housing between 0.20-0.35% M/M, i.e. at the very least matching or accelerating from the 0.21% M/M in July, but with CPI-specific categories again of prominence.
- There is almost no reasonable outcome from the CPI data to prevent the FOMC from cutting next week – but the result could be a market mover either way given lingering hopes of a 50bp cut. The default FOMC position is seen as a 25bp cut unless CPI leaves the door open to 50bp. An in-line figure would likely see implied September rates shift further toward 25bp from 32bp at typing.
- Landing in the FOMC’s blackout period, a weak report that seriously increases odds of a 50bp cut will see markets on tenterhooks for an unofficial blackout period steer, a la WSJ in June 2022 tipping a 75bp (as opposed to 50bp expected to pre-blackout) hike.
PLEASE FIND THE FULL REPORT HERE: USCPIPrevSep2024.pdf
MNI (LONDON)
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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