US DATA: Headline CPI Comes In Soft, But No Thanks To Food And Energy
Jun-11 12:54
Headline inflation came in below-expected at 0.08% M/M (0.20% MNI median) - but this was due entirely to the downside miss in core items.
- Food prices rose 0.29% (-0.08% prior, 0.20% median) with energy down 1.0% M/M (Corrected from earlier bullet) (-1.2% median, 0.7% prior).
- Within food: away from home rose 0.31%, the 4th consecutive increase above 0.3% (and a potential upside driver of core PCE), while food at home saw a rebound to 0.27% after -0.44% in April.
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BOE: Mann's slides more theoretical rather than giving a neutral estimate
May-12 12:54
Mann has begun speaking. The slides on the website appear to be more theoretical and don't really give at first glance an explicit estimate of where the neutral rate is right now.
BOE: Mann due on the next BOE Watchers' Panel
May-12 12:46
- Mann will participate in the 13:50BST panel entitled "The neutral rate of interest". The accompanying slides will be available here on the BOE website.
- Mann herself as a “activist” member and has recently been hard to predict in her voting record. She had been the most hawkish member of the MPC – continually dissenting against rate cuts, but she switched her view in February, arguing for a larger 50bp cut to 4.25% than the majority of the MPC favoured but still noting that she preferred Bank Rate to be kept in restrictive territory. She then voted against a sequential cut in March and again at this meeting.
- She has previously cited expectations in the MaPS which had previously seen the median neutral rate of interest at 3.50% - this fell to 3.25% in the most recent survey. She has always been very forthright about her views and explained her voting decisions, so we will be watching this appearance closely.
GILTS: Little Respite For Bulls
May-12 12:43
Gilt futures registered fresh session lows at 91.65 just ahead of midday, with cross-market moves/wider risk appetite remaining in control.
- That level remains intact on a retest in recent trade.
- E-minis hold near fresh session highs that were registered as NY participants started to filter in.
- The reduction in Sino-U.S. trade tensions has dominated today, supporting the USD and equities, while weighing on core global FI.
- Next support still seen at the April 15 low (91.43), with the short-term bearish technical threat deepening.
- Yields 6-9bp higher, 5s lead the sell off, flattening of the curve intact.
