US: Focus on CPI data today - Nomura

Analysts at Nomura expect a steady 0.231% (2.192% y-o-y) m-o-m in US core CPI inflation in October.

Key Quotes

“Idiosyncratic declines in some components of the core CPI in September will likely revert in October. In particular, used vehicle prices declined 3.0% m-o-m in September and contributed to the downside surprise in core CPI inflation relative to our forecast. Most other core CPI components were in line with our expectations and support our medium term inflation outlook.”

“At the moment, we think the decline in used vehicle prices was transitory and should partially revert in October. Moreover, the notable slowdown in homeowners’ equivalent rent (HOER) in September was concentrated in the Midwest, implying that HOER inflation should pick up in October, and we expect a 0.26% m-o-m increase in rent CPI.”

“Elsewhere, we expect a modest 0.5% m-o-m increase in lodging-away-from-home prices, a 2.9% decline in airline fare prices.”

“Among non-core components, we expect a modest 0.1% m-o-m increase in the CPI for food. The CPI for energy likely rebounded considering seasonally-adjusted prices of energy components. Altogether, we expect a solid 0.352% increase in headline CPI (2.555% y-o-y). Our forecast for CPI NSA is 252.965.”