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Sharpest Decline In ToT Since 3Q09

US DATA
  • Core PCE inflation was in line with expectations in the Q3 advance release, cooling only modestly from 4.7% to 4.5% annualized in Q3.
  • However, the GDP price index declined by more than expected, slowing from 9.0% to 4.1% (cons 5.3%) with slowing in both overall consumption and business deflator inflations.
  • What stood out most though was a sharp deterioration in the terms of trade as export prices fell particularly heavily, with the ToT falling -6.4% annualized for the largest quarterly decline since 3Q09 although strong increases in 1H22 saw annual growth just about remain positive at 0.6% Y/Y.


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