UK DATA: Clothing the major driver of CPI surprise; the rest largely cancels out
Mar-26 07:28
- Looking in more detail - the survey date was 18 February. That had been uncertain and wasn't the base case of all sell side analysts. That puts the survey period during the half term school holidays. Despite this air fares contributed negatively, by -0.01ppt.
- Clothing and footwear contributed -0.14ppt to the -0.15ppt change in headline CPI (and were also the big driver of soft core goods). There was a -0.60%Y/Y fall versus a 1.75%Y/Y increase in January. The ONS notes that the February figure was the first negative annual rate since October 2021. It was largely driven by women's garments.
- Data processing equipment, second hand cars and personal effects offset some of this, contributing +0.06ppt, +0.02ppt and +0.02ppt to headline CPI respectively. Furniture, tools and recording media each contributed -0.02ppt, with smaller falls across most other core goods categories.
Looking within services:
- Restaurants and cafes contributed 0.05ppt to headline CPI - rising 4.08%Y/Y from 3.53%Y/Y in Jan.
- Telephone and telefax equipment and services contributed +0.03ppt - rising 6.88%Y/Y from 5.46%Y/Y. The breakdown will be important here - how much is indexed services that will be persistent?
- Cultural services contributed -0.04ppt to headline CPI - rising 4.69%Y/Y, down from 6.24%Y/Y. This can often be reversed.
- Accommodation services contributed -0.05ppt to headline CPI, rising 1.41%Y/Y from 2.85%Y/Y in Jan. Note that this includes the new methodology of including advance bookings instead of just night before bookings.
- Rental prices contributed -0.03ppt to headline CPI rising 7.43%Y/Y from 7.79%Y/Y in Jan.
And non-core:
- Alcoholic beverage prices contributed +0.03ppt (increasing 2.48%Y/Y, up from 1.01%Y/Y in Jan).
- There were negligible contributions from the rest of food, non-alcoholic beverages and tobacco.
- Fuels and lubricants (for vehicles) -0.01ppt contribution to headline CPI (broadly in line).
Want to read more?
Find more articles and bullets on these widgets:
Historical bullets
BUNDS: A busy Overnight Session Following the German Election
Feb-24 07:21
- A busy overnight session for Bund, the contract saw a decent 30 ticks lower gap on the open, following a more positive German election results, prompting Desks to look for an increase spending out of Germany.
- Germany's Conservative Friedrich Merz is looking to quickly form a New Government.
- The German Bund drifts towards the 132.00 figure into the Cash open, it is now reversing Friday's poor set of Data out of the US, and continuation down to 131.73 would represent a full unwind of the French PMI miss.
- This is another light Week on the data front, the main focus will be on Friday, with CPIs and the US Core PCE.
- Today sees the German IFO and the final EU CPI.
- Early focus will be the completion of rolling Treasuries and Gilt March positions into June, and aside from the Data on Friday, Month End and the start of EUREX rolls will come into play.
- March Expiry for Bund is on the 6th March, Month End extensions are large for the US, Average for the EU and a non event for the UK.
- SUPPLY: Belgium 2029, 2034, 2038, EU €2.5bn 2027 (would equate to 36.1k Schatz) could weigh, EU €2.5bn 2039 (equates to 27k Bund) could also weigh.
- SPEAKERS: BoE Lombardelli, Ramsden, Dhingra.
EURJPY TECHS: Approaching Support
Feb-24 07:19
- RES 4: 161.35 61.8% retracement of the Dec 30 - Feb 10 bear leg
- RES 3: 161.19 High Feb 13
- RES 2: 160.38 50-day EMA and key short-term resistance
- RES 1: 159.04 20-day EMA
- PRICE: 157.08 @ 07:19 GMT Feb 24
- SUP 1: 155.82/155.61 Low Feb 21 / 10 and the bear trigger
- SUP 2: 155.15 Low Sep 16 ‘24
- SUP 3: 154.42 Low Aug 5 ‘24 and key medium-term support
- SUP 4: 153.87 Low Dec 14 ‘23
EURJPY last week, pulled back further from its recent high. Attention is on key short-term support at 155.61, the Feb 10 low. Clearance of this level would highlight an important bearish break and set the scene for an extension towards 155.15, the Sep 16 ‘24 low, and 154.42, the Aug 5 ‘24 low and a key medium-term bear trigger. Initial firm resistance to watch is 159.04, the 20-day EMA. Key resistance is unchanged at 160.38, the 50-day EMA.
BTP TECHS: (H5) Support Stays Intact For Now
Feb-24 07:11
- RES 4: 122.85 High Dec 12
- RES 3: 121.88 76.4% retracement of the Dec 11 - Jan 13 bear leg
- RES 2: 120.98/121.00 61.8% of Dec 11 - Jan 13 bear leg / High Feb 7
- RES 1: 120.47 High Feb 13
- PRICE: 119.82 @ Close Feb 21
- SUP 1: 118.95 Low Feb 19
- SUP 2: 118.65/117.16 Low Jan 24 / 13 and the bear trigger
- SUP 3: 116.59 76.4% retrace of the Jun - Dec ‘24 bull cycle (cont)
- SUP 4: 116.07 Low Jul 8 ‘24 (cont)
A bullish cycle in BTP futures remains intact and the latest pullback appears corrective - for now. A stronger reversal higher would refocus attention on 120.98 (recently pierced) and 121.88, Fibonacci retracement points. On the downside, initial key support to watch lies at 118.65, the Jan 24 low. Clearance of this price point would instead highlight a reversal and the end of the corrective bull cycle. First support lies at 118.95, the Feb 19 low.
Trending Top
Dec-05 15:48
