US headline CPI showed a 0.3% m-o-m increase in December - Nomuras

Sandeep Kanihama FXStreet Contributor

Analysts at Nomura note that the US headline CPI showed a 0.3% (0.282%) m-o-m increase in December, matching the market consensus (+0.3%), but a little below Nomura’s forecast of a 0.4% (0.361%) gain.

Key Quotes

“However, on an unrounded basis, CPI NSA was 241.432, falling short of expectations (Consensus: 241.508, Nomura: 241.674). In details, relative to our expectations, non-core components (food and energy prices) were weaker than expected, but core CPI inflation accelerated slightly as we had expected to 0.230% from 0.151%, previously.”

“Overall, despite some weakness in non-core components, the underlying inflation trend appears to be moving broadly in line with our expectation. There is nothing surprising to lead us to alter our medium-term inflation forecast. Based on CPI and PPI, our forecast for core PCE inflation is +0.08% m-om in December, pushing up its y-o-y change rate slightly to 1.7% (1.661%) from 1.6% (1.647%). While there is much uncertainty associated with trade and tax policies under a new administration, we maintain our view that core PCE inflation will pick up, but only at a gradual pace.”

“Core CPI: Excluding food and energy, core CPI increased by 0.2% (0.230%) m-o-m, matching expectations (Consensus: +0.2%, Nomura: +0.215%). Core CPI inflation accelerated from a 0.151% m-o-m in the prior month. The y-o-y core CPI inflation inched up to 2.2% from 2.1%, previously.”

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.

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