COMMODITIES: Crude Rangebound, Gold Steady After Fed Rate Hold

Manheim Auctions's gauge of US used vehicle prices fell by the most in 13 months at-1.1% in May (after +2.8% the prior month), more or less returning the index level to where it was at the start of the year.

• On an individual month-to-month percentage change basis the series hasn't corresponded particularly well with CPI used vehicles, with Manheim instead working with a very rough 2-month lead. The last two months, used vehicle prices in CPI have dropped 0.5% M/M and 0.7% M/M.
• Manheim points to a potential uptick in May/June CPI before pulling back, but it's unknown how much of the price effect is tariff- and tariff-front-running related.

• RES 4: 150.49 High Apr 2   
• RES 3: 149.28 High Apr 3
• RES 2: 148.54/65 76.4% of Mar 28 - Apr 22 bear leg / High May 12
• RES 1: 146.29 50-day EMA 
• PRICE: 144.89 @ 16:39 BST May 19
• SUP 1: 144.67/143.45 Low May 19 / Low May 8      
• SUP 2: 142.36 Low May 6 
• SUP 3: 141.97 Low Apr 29  
• SUP 4: 139.89 Low Apr 22 and a bear trigger

USDJPY continues to trade below the May 12 high and the pair maintains a softer tone. The latest pullback underpins the view that gains since Apr 22 appear corrective. A stronger reversal lower would refocus attention on 142.36, the May 6 low. First support to watch is 145.21, the 20-day EMA. It has been pierced, a clear break would strengthen a bearish theme. Key short-term resistance has been defined at 148.65, the May 12 high.

• SF Fed staff research finds that across-the-board 25% tariffs would see a 9.5% increase in near-term prices for investment goods and 2.2% for consumption goods assuming full pass through to finished goods.
• Their research focuses on the near-term direct effects and doesn’t allow for dynamic adjustments including responses of importers, domestic producers, consumers or policymakers as well as potential exchange rate adjustments.
• The analysis includes a breakdown of imported consumer and investment goods and their current reliance on China, Mexico, Canada, the EU and the rest of the world.
• This is useful considering the heterogeneity seen in US tariff policy over the past two months. Recall the push to much larger tariffs on China than all other trading partners on Apr 9, which of course has been mostly reversed with the significant de-escalation in US-China trade policies following trade discussions at the May 17-18 weekend.  
• 25% tariffs on China specifically would add ~0.3pp to PCE prices and closer to 1.5% for private investment equipment (PEQ) prices. Both these figures would be higher in the case of 25% tariffs on Mexico.