US INFLATION: MNI US Inflation Insight: Only A Hint Of Tariff Impact So Far
May-15 19:09
We've just published our analysis of April's CPI and PPI data, with implications for the Fed's preferred PCE price gauge: Download Full Report Here
- A slightly soft April core CPI reading vs consensus (0.24% M/M vs 0.26% MNI unrounded Median, 0.06% prior) came amid an undershoot on core goods prices and a slightly above-expected core services reading.
- The latter came largely on account of rebounds in volatile services categories though: namely lodging, car insurance, and airfares (which combined contributed 0.14pp more to core CPI than they did in March).
- Rental inflation was a touch stronger than expected again this month, but supercore CPI at 0.21% M/M was exactly in line with MNI consensus.
- The biggest hint of a tariff-induced pickup in inflation is that core goods ex-used cars CPI posted the strongest unrounded rate of inflation since March 2023. Category-by-category though, it was less clear.
- The CPI report drew very little market reaction as it came in reasonably close to expectations.
- There were net dovish takeaways from Thursday’s PPI report albeit with the caveats including the fact that it’s likely too early to observe price impacts from April’s reciprocal tariffs.
- Overall the month’s inflation data is set to keep the Fed’s preferred PCE price gauge in tame territory, with consensus for core PCE closer to 0.1% M/M for the month vs 0.2% coming into the week.
- Albeit that too comes with caveats, including a likely upward revision to March PCE, and the fact that the idiosyncratic “Portfolio management & investment advice” category was a major deflationary impulse.
- A next Fed cut is only just fully priced for the September FOMC (three meetings away) along with a cumulative 55bp of cuts for 2025.
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US STOCKS: Late Equities Roundup: Pharmaceuticals, Discretionary Stocks Lagging
Apr-15 19:03
- Stocks cling to marginally lower levels late Tuesday, no particular headline driver, just profit taking in late trade, markets wary of trade related headline risk. Consumer Discretionary, Health Care (pharmaceuticals) and Communication services sectors underperforming.
- Currently, the DJIA trades down 85.47 points (-0.21%) at 40438.18, S&P E-Minis down 6 points (-0.11%) at 5435.75, Nasdaq down 15.4 points (-0.1%) at 16816.91.
- The Health Care sector underperformed in early trade after Pres Trump target pharmaceuticals for trade probes late Monday: Albemarle Corp -5.59%, Molina Healthcare -3.59%, Zimmer Biomet Holdings -4.01%, Moderna -3.81%. Elsewhere, Meta declined 2.11% while Alphabet -2.05%.
- A mix of banks, interactive media and tech stocks led gainers in the first half: Netflix gained 5.4% in late trade. Financial sector gainers included Bank of America +4.28%, Citigroup +3.46%, Huntington Bancshares +2.51% and Wells Fargo +2.73%.
- Tech stocks followed with Hewlett Packard Enterprise +4.9%, Palantir Technologies +5.57% and Crowdstrike Holdings +4.45%.
- Earnings expected late Tuesday include: Interactive Brokers, JB Hunt Transport, United Airlines and Omnicom Group. The following are expected to announce Wednesday: First Horizon Corp, Citizens Financial, Progressive Corp, US Bancorp, Prologis, Abbott Laboratories, Kinder Morgan, CSX Corp and Alcoa.
EURJPY TECHS: Key Resistance Remains Exposed
Apr-15 19:00
- RES 4: 165.43 High Nov 8
- RES 3: 164.90 High Dec 30 ‘24 and a key medium-term resistance
- RES 2: 164.55 High Jan 7
- RES 1: 163.55/164.19 High Apr 14 / High Mar 18 and the bull trigger
- PRICE: 161.65 @ 16:06 GMT Apr 15
- SUP 1: 161.03/158.30 50-day EMA / Low Apr 7 and key support
- SUP 2: 157.02 76.4% retracement of the Feb 28 - Mar 18 bull cycle
- SUP 3: 155.60 Low Low Mar 4
- SUP 4: 154.80 Low Low Feb 28
A recent pullback in EURJPY appears corrective and the strong rally from the Apr 7 low highlights the end of the correction. Key short-term support has been defined at 158.30, the low on Apr 7. A break of this level is required to signal scope for a deeper retracement. This would open 157.02, a Fibonacci retracement. For bulls, a continuation higher would expose 164.19, the Mar 18 high and the bull trigger. A break of this hurdle would resume the uptrend.
LOOK AHEAD: Wednesday Data Calendar: Retail Sales, IP/Cap-U, 20Y Bond Re-Open
Apr-15 18:54
- US Data/Speaker Calendar (prior, estimate)
- 16-Apr 0700 MBA Mortgage Applications (20.0%, --)
- 16-Apr 0830 Retail Sales Advance MoM (0.2%, 1.3%), Ex Auto (0.3%, 0.4%)
- 16-Apr 0830 Retail Sales Control Group ((1.0%, 0.6%)
- 16-Apr 0830 NY Fed Services Business Activity (-19.3, -12.4)
- 16-Apr 0915 Industrial Production MoM (0.7%, -0.2%)
- 16-Apr 0915 Capacity Utilization (78.2%, 77.9%)
- 16-Apr 0915 Mfg (SIC) Production (0.9%, 0.2%)
- 16-Apr 1000 Business Inventories (0.3%, 0.2%)
- 16-Apr 1000 NAHB Housing Market Index (39, 38)
- 16-Apr 1130 US Tsy 17W bill auction
- 16-Apr 1200 Cleveland Fed Hammack moderated Q&A w/ text
- 16-Apr 1300 US Tsy $13B 20Y Bond reopen (912810UJ5)
- 16-Apr 1330 Fed Chair Powell Economic Club of Chicago, outlook (text, Q&A)
- 16-Apr 1600 Net Long-term TIC Flows (-$45.2B, --)
- 16-Apr 1600 Total Net TIC Flows (-$48.8B, --)
- 19-Apr 1900 KC Fed Schmid & Dallas Fed Logan on economy (no text, Q&A)
