USD, CPI price analysis and news
- USA Core THI Falls short of expectations
- USD under pressure, Gold Rebound
The US core CPI falls short of expectations
DATA RECAP: The overall interest rate rose 0.3% below expectations of 0.4% over the month, with an annual interest rate of 5.3%, which is in line with estimates. The baseline rose 0.1% vs. 0.3% above expectations, while the annual rate fell short of expectations by 4% vs. 4.2%. Temporary factors, which have been the focus of much of the increase, have begun to reverse as used cars fell slightly by 1.5%, the largest monthly decline since November 2016. %. As such, it reinforces the prospect of the Federal Reserve that the rise in inflation should be temporary. In addition, if ISM Mfg.
US inflation components
Figure 1. US consumer price index vs. average ISM production and non-production prices-paid
MARKET RESPONSE: The USD came under general pressure. Similarly, US yields have fallen since the inflation report, while gold prices rose slightly. However, given that the central bank acknowledges that they have already met their downgrade condition for significant progress in inflation, the impact of this report on the central bank’s outlook is limited. This means that when stock markets are stronger, it prevails in calls for stagflation.
USD, US PRICES AND THE GOLD RESPONSE TO THE US CPI