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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 puts core CPI inflation at 0.3% M/M in April after a surprisingly strong Q1 averaging 0.37% M/M.
- Two potential drivers in April are idiosyncratic to CPI and won’t impact PCE, potentially limiting the market impact to surprises in supercore CPI in particular this month.
- i) Analysts are tightly grouped around core CPI at 0.3%, with the moderation from March driven mainly by softer but still very strong estimates for vehicle insurance after its third-strongest print in fifty years.
- ii) A health insurance reset isn’t expected to have a significant impact although surprises could have a large impact on supercore CPI (but again, not PCE).
- PPI unusually lands the day before CPI, meaning more accurate post-CPI estimates for core PCE.
- A 0.30 core CPI print would see the three-month ease from a particularly strong 4.5% back to 4.15% annualized, although the six-month would accelerate two tenths to 4.06% annualized for its third month above the Y/Y.
- An upside surprise will dial up concerns that the Q1 acceleration wasn’t just a bump and could see 2Y Treasury yields eye 5% again, with the start point to Fed cuts pushed further out amidst a still high bar to a rate hike.
- A downside surprise would still see sensitivity but the onus is on multiple low inflation readings before cut expectations are meaningfully brought nearer.
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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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