Archiv für den Autor: admin
In the U.S., consumers are paying more for everything. In China, the inflation problem is very different
Russia’s war in Ukraine means there’ll be no return to normality for Europe’s economy
U.S. fintech Plaid taps Booking.com veteran to lead its European expansion
Stocks rebound on hope inflation is peaking, Nasdaq adds 1%
ForexLive European FX news wrap: Dollar slightly firmer awaiting US CPI release
US consumer inflation on the cards today, what to expect?
In short, inflation is expected to run hot as it has been in the past few months. The Russia-Ukraine war has just exacerbated conditions globally and the recent lockdown in Shanghai certainly won’t help with the situation.
But what is the market anticipation coming into today and where is the action going to be?
Let’s first take a look at the forecast distribution for today’s estimate:
As you can see, there’s quite a skew towards being above the expected +8.4% y/y estimate. While this is just a forecast, it does point to some expectation that there are certain quarters of the market expecting higher inflation numbers. As such, I’d wager anything above +8.7% y/y or closer towards +9.0% y/y to produce a stronger „beat“.
Meanwhile, a reading closer towards +8.0% y/y is likely to help soothe the market a little that at least the inflation ‚blow up‘ isn’t as uncontrollable as feared.
As for the reaction, the bond market is the first place to look at. The recent selling is continuing as yields are running higher and a beat on estimates will surely spur further momentum in that. In turn, the dollar is likely to catch a further tailwind – especially against the yen.
On the flip side, the opposite reaction to the above will apply; all else being equal that is.
US March NFIB small business optimism index 93.2 vs 95.7 prior
German gas reserves would only last until late summer should Russia stop supplies now
Germany April ZEW survey current conditions -30.8 vs -35.0 expected
Economic sentiment -41.0 vs -48.0 expected
Prior -39.3
The headline reading is the lowest since May last year with ZEW noting that the current economic situation reflects pessimism and experts assume that conditions will continue to deteriorate. But there was a decline in inflation expectations, giving some cause for ohpe. That said, the prospect of stagflation remains over the next six months.