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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.
US OUTLOOK/OPINION
- There is broad analyst consensus for further core goods deflation in July, helped by used car prices seen falling further before a potential short-term uplift in the fall judging by latest wholesale prices.
- Core goods prices excluding used cars meanwhile have broadly tracked sideways for more than a year now barring a sharp decline in Nov’23.
- Fading some strong monthly prints for core PPI inflation in the first half of the year, this looks to have supported anecdotal evidence that firms are finding it harder to pass on costs to consumers.
- Indeed, from the Fed’s latest Beige Book dated Jul 17: “almost every District mentioned retailers discounting items or price-sensitive consumers only purchasing essentials, trading down in quality, buying fewer items, or shopping around for the best deals.”
- And the final S&P Global US services/composite PMI published Aug 5: “While a number of companies responded to higher input costs by increasing their selling prices accordingly, there were other reports that competitive pressures led some firms to lower their charges. The rate of output price inflation was solid, but eased for the second month running to the slowest since January”.
- With PPI landing the day ahead this month, there is a chance that an upside surprise could see expectations that it will channel into stronger CPI core goods inflation, but we think the two reports are better read in conjunction for a better understanding of latest pricing power.
- The latest NY Fed’s GSCPI is back at neutral after some mildly deflationary readings but doesn’t offer a strong steer.
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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