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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.
DATA REACT
- Core PCE inflation was softer than expected in May, rising +0.35% M/M vs average consensus of +0.42% M/M.
- In doing so, it keeps core PCE inflation running in an unusually stable range, having been between 0.30-0.34% in the prior three months and with minimal revisions to March and April, with the widening wedge between CPI and PCE measures largely down to CPI strength in airfares and OER.
- Nominal incomes were broadly in line with expectations, but spending suffered more than expected, sliding -0.4% M/M in real terms (cons -0.3%) after April was revised down from +0.7% to +0.3% M/M.
- The weakness in spending follows the surprise downward revision to +1.8% annualized in yesterday’s third Q1 GDP print, and comes with upward revisions to the savings ratio such that it hasn’t cranked down to new lows since 2008 at 4.4% in April as originally thought but rather has stabilised at 5.4% in May.
- Skittish market reaction to the data with ECB headlines on its anti-fragmentation tool also hitting, but it doesn’t materially change today’s risk-off theme of a sizeable belly-led rally in Treasuries (5YY -7.5bps) and Fed hike expectations being trimmed to 67bps for next month’s FOMC and 178.5bps over the four meetings to year-end (-10bps from yesterday).
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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