MNI EM EXCLUSIVE: MNI Speaks With Brazil's Former Treasury Secretary

Import prices were stronger than expected in August for the third time in the past four months but with the surprise offset by yet another downward revision having been lowered in the past six releases. The latest data suggest that some exporters continued to take some of the tariff hit by lowering their relative prices into July, especially China, but with signs that this stopped in August. Further large revisions do however require the data to be taken with caution.  

• Import prices surprisingly increased 0.3% M/M in August (cons -0.2) albeit after a downward revised 0.2% (initial 0.4) in July, with all figures here on a non-seasonally adjusted basis.
• Import prices ex petroleum meanwhile increased 0.2% M/M in August (cons 0.1) for on net weaker than expected considering a downward revised 0.0% M/M in July (initial 0.3)
• The latest profile sees this ex-petroleum series with its strongest monthly print since April after some soft months through May-Jul that hinted at some exporters taking part of the tariff hit. Import prices don’t include tariffs so a lower price could indicate an attempt to preserve post-tariff competitiveness.
• Looking by major trading partner, China still looks to have been the country that has made the largest concession to tariffs (with import prices declining an average -0.6% M/M through Mar-July vs 0.0% in the same period last year) although that has possibly stopped with the latest 0.6% M/M in Aug (vs 0.0% in Aug 2024). Note the scope for revisions however, with the -0.9% M/M now showing for July originally reported as 0.2% M/M.  
• Elsewhere, import prices from the EU saw a second solid increase (0.5% M/M after 0.4%), as did Canada (0.5% after 0.6%) and Mexico (0.4% after 0.4%) when switching to manufactured prices for the latter two to avoid swings from oil prices.
• More cleanly capturing trends, overall import price inflation of 0.0% Y/Y was its highest since Apr after two months at -0.6% Y/Y, whilst import prices ex petroleum inflation ticked up three tenths to 0.9% Y/Y although that’s only its strongest since May having recently peaked at 2.3% in 4Q24.
• Import prices by country: China -3.1% Y/Y, EU 0.0% Y/Y, Canada -0.1% Y/Y (manufactured 1.0% Y/Y) and Mexico 0.7% Y/Y (manufactured 2.1% Y/Y). 

• MNI: US REDBOOK: SEP STORE SALES +6.5% V YR AGO MO
• US REDBOOK: STORE SALES +6.3% WK ENDED SEP 13 V YR AGO WK

Schatz Block trade, suggest buyer:

• DUZ5 ~8.13k at 106.98.