CPI data confirms trend, gives green light to test support on bonds - ANZ


Analysts at ANZ explained that the US CPI came in above expectations at 0.5% m/m, with core inflation at 0.35% (3m ann. 2.9% - 6-yr high).

Key Quotes:

"The market has been waiting for this number to confirm if the pickup in average hourly earnings is feeding through to broader price pressures.

The data appears to confirm this trend and gives a green light to test support on bonds.

Energy prices were a significant driver of the headline, while core inflation was lifted by apparel costs (+1.7%); used vehicles (+2.4%); OER Residences (+0.3%); medical care services (+0.6%); and transportation services (+0.8%) = broad based. Separately, retail sales were weaker than expected. Sales fell in 7 of 13 categories.

The combination of higher wage growth and declining consumption momentum may suggest the fall in the savings rate, rise in credit, and interest rates could be starting to pinch households a bit. The data are volatile, so it is too early to call ‘stagflation’, however we are keeping a close eye on the consumer with saving rates so low."

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News


Latest Forex News

Editors’ Picks

GBP/USD holds the lower ground below 1.2550 on downbeat UK GDP

GBP/USD stays pressured below1.2550 after flashing the biggest losses in two weeks the previous day. The UK GDP disappointed expectations by expanding 1.8% MoM in May. Focus shifts to the US CPI data. 

GBP/USD News

EUR/USD holds steady below 1.1350 amid risk-aversion

EUR/USD holds steady below 1.1350, as US dollar trades firmer amid broad risk-aversion. The German ZEW Survey to show signs of an economic turnaround. Heightened expectations for an EU fiscal stimulus plan underpin the shared currency. 

EUR/USD News

Gold: $1796 is the level to beat for the XAU bears

Gold is trying hard to recover ground above the $1800 mark, as the US dollar continues to benefit from broad risk-aversion amid looming coronavirus risks. Let’s see how it is positioned ahead of the critical US CPI release.

Gold News

Forex Today: US dollar seizes control as risk aversion returns, a busy docket ahead

Broad US dollar strength extended into Asia, as risk-averse market conditions persisted amid intensifying coronavirus fears and US-China tensions. The Asian equities followed the late sell-off on Wall Street while the US stock futures struggled with its recovery.

Read more

WTI recovers from intraday low under $40.00 ahead of API inventories

WTI’s pullback from $39.30 fails to defy a two-day losing streak. China’s sustained increase in oil imports confronts chatter of easing output cuts. US inflation data, API stockpiles and American earnings are in the spotlight.

Oil News

Forex MAJORS

Cryptocurrencies

Signatures