US: CPI firming beneath weakness - TDS
Analysts at TD Securities note that the US June CPI modestly disappointed, with headline CPI rising 0.1% m/m while core CPI rose 0.2% m/m but on the weak side.
Key Quotes
“Inflation still managed to firm to 2.9% y/y (with core inflation hitting 2.3% y/y).”
“The small downside can be traced to weak energy services along with broad weakness in goods prices and sharp drops in a few services prices (hotels and airfares).”
“Overall, the June CPI report remains consistent with gradual normalization by the Fed while offering limited impetus for a faster pace of hikes. This should keep the Fed on track for gradual hikes (one each quarter in our view).”
“The CPI report is more noise than direction for FX markets.”
“Focus remains on global trade developments, where FX markets appear content in rewarding the USD for now.”
Author
Sandeep Kanihama
FXStreet Contributor
Sandeep Kanihama is an FX Editor and Analyst with FXstreet having principally focus area on Asia and European markets with commodity, currency and equities coverage. He is stationed in the Indian capital city of Delhi.
