MNI US OPEN - Core CPI M/M Expected to Accelerate Again
EXECUTIVE SUMMARY
- MNI US CPI PREVIEW: HIGH EARLY BAR TO SEPTEMBER FED HOLD
- CHINA URGES FIRMS NOT TO USE NVIDIA H20 CHIPS IN NEW GUIDANCE
- RBA LOWERS CASH RATE TO 3.6%, BULLOCK POINTS TOWARD FURTHER CUTS
- LESS EVIDENCE OF ACCELERATING PAYROLLS DOWNTREND IN UK LABOUR MARKET DATA
Figure 1: Recent US inflation developments
NEWS
MNI US CPI PREVIEW: High Early Bar to September Fed Hold
The CPI report for July is released on Tuesday Aug 12, at 0830ET. Consensus sees core CPI inflation at a seasonally adjusted 0.3% M/M in June and unrounded analyst estimates broadly echo this with a median 0.32% M/M. It would mark a further acceleration from 0.23% M/M in June and 0.13% M/M in May for its fastest pace since January, with the latest firming seen coming from core goods inflation doubling to 0.4% M/M. Headline CPI meanwhile is seen at 0.2% M/M (MNI median 0.24% M/M) with a gasoline drag.
US (BBG): Fed Chair Search Expands to Include Bowman, Jefferson and Logan
The Federal Reserve’s two vice chairs, Michelle Bowman and Philip Jefferson, and Dallas Fed President Lorie Logan are under consideration to serve as chair of the central bank when the position opens next year, according to two administration officials. Treasury Secretary Scott Bessent, who is running the search, will interview additional candidates in the coming weeks, said the officials, who were granted anonymity to speak candidly about the process. President Donald Trump is expected to make his final announcement this fall, they said. Others who remain under consideration include Kevin Hassett, a close economic adviser to Trump, Fed Governor Christopher Waller, economist Marc Sumerlin and former Fed officials Kevin Warsh and James Bullard, the people said.
US (MNI): Trump to Nominate E.J. Antoni as BLS Commissioner
U.S. President Donald Trump said Monday that he will nominate the economist E. J. Antoni as commissioner of the Bureau of Labor Statistics, currently the chief economist at the conservative Heritage Foundation. Antoni would replace Erika McEntarfer, who Trump fired as BLS commissioner on August 1 after an unexpectedly weak jobs report in a move that has been widely derided by economists and investors worried about long-term data reliability.
US/CHINA (BBG): China Urges Firms Not to Use Nvidia H20 Chips in New Guidance
China has urged local companies to avoid using Nvidia Corp.’s H20 processors, particularly for government-related purposes, complicating the chipmaker’s attempts to recoup billions in lost China revenue as well as the Trump administration’s unprecedented push to turn those sales into a US government windfall. Over the past few weeks, Chinese authorities have sent notices to a range of firms discouraging use of the less-advanced semiconductors, people familiar with the matter said, asking not to be named discussing sensitive information. The guidance was particularly strong against the use of H20s for any government or national security-related work by state enterprises or private companies, the people said.
US/CHINA (BBG): China Commerce Ministry Expert Sees Uncertainty Despite US Truce
Trade ties between the world’s two biggest economies remain vulnerable to uncertainty even though President Donald Trump extended a pause for elevated tariffs on Chinese goods for another three months, according to a senior researcher at the Ministry of Commerce in Beijing. A better outcome for China would include a mechanism to ensure both sides make good on bilateral agreements, said Zhou Mi, an expert at the Chinese Academy of International Trade and Economic Cooperation, a think tank that operates under the aegis of the ministry directly involved in the trade talks.
US/S.KOREA (BBG): South Korea’s Lee to Visit US for First Meeting With Trump
South Korean President Lee Jae Myung will visit the US this month for his first meeting with President Donald Trump since taking office in June, a high-stakes trip set to spotlight a recently inked trade deal between the allies as well as security issues they share. The meeting between Lee and Trump on Aug. 25 in Washington will also include a lunch, South Korea’s presidential office said on Tuesday. The leaders will discuss ways to develop their alliance in a “future-oriented, comprehensive” manner, Lee’s spokesperson Kang Yu-jung said.
US/S.AFRICA/BRAZIL (WaPo): U.S. Escalates Human Rights Criticism of South Africa and Brazil
The Trump administration is significantly escalating U.S. government criticism of perceived foes in South Africa and Brazil as the State Department’s political leadership reimagines America’s role in documenting human rights abuses around the world, according to leaked draft documents reviewed by The Washington Post. The department’s annual human rights reports, which are scheduled to be transmitted to Congress on Tuesday, according to a memo seen by The Post, are expected to target the South African government for its alleged mistreatment of White Afrikaner farmers and the Brazilian government for its alleged persecution of former president Jair Bolsonaro, an ally of President Donald Trump.
RBA (MNI): RBA Lowers Cash Rate to 3.6%, Bullock Points Toward Further Cuts
The Reserve Bank of Australia cut the cash rate by 25 basis points to 3.6% on Tuesday, with forecasts now showing core inflation reaching the 2.5% midpoint of its target range by end-2027. “With underlying inflation continuing to decline back towards the midpoint of the 2-3% range and labour market conditions easing slightly, as expected, the Board judged that a further easing of monetary policy was appropriate,” it said in a statement. “I wouldn't say, one way or the other, that we won't be having back-to-back cuts,” Bullock told reporters after the largely-anticipated move.
EUROPE/UKRAINE (MNI): 26 EU Leaders Reiterate Support for Kyiv Ahead of Wednesday Trump Call
All but one of the European Union's member state leaders have added their signature to a statement reiterating their support for Ukraine, opposing any changes to the country's borders, and calling for Kyiv's direct involvement in any negotiations. The statement comes ahead of a high-profile meeting between US President Donald Trump and Russian President Vladimir Putin in Alaska on Friday, 15 August. At present, it is seen as unlikely, but not impossible, that Ukrainian President Volodymyr Zelenskyy is invited to take part as well.
JAPAN (BBG): Japan 10Y Bond Untraded All Day for First Time Since March 2023
Japan’s current benchmark 10-year government bond wasn’t traded at all on Tuesday, the first such instance since March 27, 2023, according to data from an institutional brokerage. Activity in the bond market was crimped by a local holiday and ahead of the scheduled release of the closely watched US consumer price index later in the day. No trades of the newly issued 10-year note were seen on Tuesday on Japan Bond Trading Co., which acts as an intermediary for transactions between financial institutions.
INDIA/PAKISTAN (BBG): Pakistan Army Chief Warns It Will Counter Any Act by India
Pakistan’s army chief accused India of continuing to fuel instability in the region and warned it was fully prepared to counter any aggression from New Delhi as tensions between the two rivals remain high following a four-day armed conflict in May. Asim Munir, widely regarded as the most powerful figure in Pakistan, made the comments on Friday at a dinner with members of the Pakistani diaspora in Florida during his second visit to the US in less than two months.
DATA
UK DATA (MNI): Less Evidence of an Accelerating Payrolls Downtrend
- UK JUN AVE WEEKLY EARNINGS +4.6% YY
- UK JUN AVE WEEKLY EARNINGS EX-BONUS +5% YY
- UK JUL CLAIMANT RATE +4.4%
- UK JUL PAYROLLS CHANGE -8353k
From the ONS: "RTI payrolled employees decreased by 26,000 between May and June 2025" This is an upward revision from -41k flash. Seems broadly in line with the range of revision estimates we had seen ahead of the release. Looking a little closer at the private sector regular pay figure (4.79% 3m Y/Y vs 4.90% prior and 4.8% cons), the single month reading for June was 4.52% Y/Y. This compares to a March 2025 Y/Y reading of 4.86%, so almost a four tenth moderation for in wage growth for the same cohort. The unemployment rate was 4.66% in the three months to June (vs 4.67% prior). While in line with Bloomberg consensus on a rounded basis, it's still somewhat notable given seven of the sellside previews we had seen looked for an increase to a rounded 4.8%.
GERMANY DATA (MNI): ZEW Underperforms in August
- GERMANY ZEW AUG ECONOMIC EXPECTATIONS 34.7
- GERMANY ZEW AUG CURRENT CONDITIONS -68.6
The German ZEW expectations index underperformed in August, falling from 52.7 to 34.7, below consensus of 39.5. The current conditions index meanwhile was also a little weaker than expected as it deteriorated from -59.5 to -68.6 (consensus -67.0). Wider sentiment continues to be on an overall uptrend in Germany, with the IFO business climate at a 14-month high, the manufacturing PMI at its joint highest of the 24-month publication window in August and the services PMI at a less significant 4-month high. However, as noted earlier, the Bundesbank weekly activity index remains on the soft side, which somewhat more closely tallies with the weaker ZEW current assessment index.
AUSTRALIA DATA (MNI): Business Outlook May Have Turned
NAB's measure of business confidence can be volatile but it has been trending higher since April and printed at 7 in July up from 5 in June and -2 in March signalling an improvement in how firms see the outlook. Business conditions moderated to 5, but are still above every month this year except June, which was revised down 2 points to 7. The activity components moderated in July but generally remained at levels above May.
FOREX: GBP Improves as Jobs Data Not as Poor as Feared
- UK jobs data came in broadly inline with expectations however, looking through the headlines may suggest more limited space with which the BoE can ease policy into year-end, largely due to the decelerating pace of job losses and a surprisingly sticky unemployment rate for the June release.
- GBP has improved as a result, and is firmer against all others in G10. GBP/USD is testing yesterday's 1.3477 high for direction and clearance here would mark the highest rate since late July - marking a resumption of the bounce off early August's pullback low. The next notable upside level is the 1.3502 50-dma, a level that could prove consequential into Thursday's prelim Q2 GDP numbers.
- US CPI is the focus going forward, with markets expecting both Y/Y and Y/Y core to inch higher by 0.1ppts apiece. Despite firmer inflation, the numbers are not expected to deter the FOMC from trimming the policy rate at the September FOMC meeting - but a much firmer reading today could limit the scope for further cuts into year-end.
- AUD is softer on the RBA rate decision. AUD/USD has extended losses on the break back below the 50-dma, with 0.6468 the next level of note. The Bank cut rates by 25bps to 3.60%, and signaling strongly that further easing would follow. EUR/AUD has snapped yesterday's weakness as a result, making layered resistance at 1.7945 the focus.
- Central bank speakers today include Fed's Barkin and Schmid.
BONDS: 10-Year Gilt/Bund Spread Wider Following UK Jobs Data
The 10-year Gilt/Bund spread is 2.5bps wider at 189bps, off earlier highs of above 190bps. This morning’s UK labour market data, which saw some stronger-than-expected elements including LFS employment growth, has been the primary driver of the widening. The remainder of today’s UK/EZ calendar is light, with main macro focus on this afternoon’s US CPI report. This report, alongside any major headline flow, should dictate moves in EGBs and Gilts for the remainder of the session.
- 10-year Gilt yields are up 2.2bps at 4.59%, off earlier highs of 4.61%.
- Today’s 5-year Gilt auction saw decent demand, which helped yields further away from session highs. The curve continues to lightly bear steepen on the session.
- 10-year Bund yields are little changed at 2.69%, close to session lows after the August German ZEW survey was a little weaker than expected.
- Bund futures volumes are once again on the soft side, while Gilt volumes fare a little better owing to the morning data and auction. Bund futures are +1 ticks at 129.63, with Gilts -23 ticks at 92.03.
EQUITIES: Eurostoxx 50 Futures Remain Above 50-Day EMA
The bounce off post-NFP lows in global equity indices has held, with the Eurostoxx 50 future still above the 50-day EMA. Additional strength refocuses attention on 5486.00, the May 20 high. To the downside, recent impulsive weakness did result in a temporary breach of the bear trigger - this makes the April 30 hi/lo range at 5078-5138 the area of downside interest. E-mini S&P prices recovered well Friday, meaning the bulk of the bounce off the NFP low is holding firm, keeping the underlying uptrend intact for now. The index holds above support at the 20-day EMA, at 6354.55. Through recent phases of weakness, the 50-day EMA at 6237.80, has held as support - and will be important on any intraday declines. Clearance of this average is required to signal a stronger reversal. The primary trend remains up, leaving key short-term resistance and the bull trigger at 6468.50, the Jul 31 high.
- Japan's NIKKEI closed higher by 897.69 pts or +2.15% at 42718.17 and the TOPIX ended 42.16 pts higher or +1.39% at 3066.37.
- Elsewhere, in China the SHANGHAI closed higher by 18.371 pts or +0.5% at 3665.918 and the HANG SENG ended 62.87 pts higher or +0.25% at 24969.68.
- Across Europe, Germany's DAX trades lower by 22.8 pts or -0.09% at 24059.48, FTSE 100 higher by 24.91 pts or +0.27% at 9154.53, CAC 40 up 27.52 pts or +0.36% at 7725.44 and Euro Stoxx 50 up 3.51 pts or +0.07% at 5335.08.
- Dow Jones mini up 51 pts or +0.12% at 44134, S&P 500 mini up 3.25 pts or +0.05% at 6402.75, NASDAQ mini up 4.5 pts or +0.02% at 23641.
Time: 10:00 BST
COMMODITIES: Gold Reapproaches 50-Day EMA Support Following Monday's Weakness
WTI futures traded poorly Friday, cracking the 50-day EMA and piercing the bear trigger. This keeps S/T momentum pointed lower. The clear break exposes $58.17, the May 30 low. Gains early last week marked an extension of a corrective cycle - which may now have concluded. $69.41 marks the 50.0% retracement of the Jun 23-24 downleg - an important level at the close. A continuation higher would open $70.96 next, the 61.8% retracement point. Gold traded lower Monday, but last week's strength returned prices toward the top-end of the recent range and supports the view that short-term weakness is corrective - for now - and a bull cycle that started Jun 30 remains intact. However, the yellow metal is within close proximity to support at $3334.23, the 50-day EMA. A clear break of this level continues to signal scope for a deeper retracement and exposes the next key support at $3248.7, the Jun 30 low. Key near-term resistance is $3439.0, the Jul 23 high.
- WTI Crude down $0.11 or -0.17% at $63.84
- Natural Gas up $0 or +0.1% at $2.957
- Gold spot up $6.15 or +0.18% at $3349.07
- Copper up $3.15 or +0.71% at $447.1
- Silver up $0.17 or +0.46% at $37.7883
- Platinum up $8.07 or +0.61% at $1341.03
Time: 10:00 BST
| Date | GMT/Local | Impact | Country | Event |
| 12/08/2025 | 1000/0600 | ** |  US | NFIB Small Business Optimism Index |
| 12/08/2025 | 1100/1200 |  GB | BOE APF Quarterly Report | |
| 12/08/2025 | 1230/0830 | * |  CA | Building Permits |
| 12/08/2025 | 1230/0830 | *** | US | CPI |
| 12/08/2025 | 1230/0830 | *** | US | CPI |
| 12/08/2025 | 1230/0830 | *** | US | CPI |
| 12/08/2025 | 1255/0855 | ** | US | Redbook Retail Sales Index |
| 12/08/2025 | 1400/1000 | US | Richmond Fed's Tom Barkin | |
| 12/08/2025 | 1430/1030 | US | Kansas City Fed's Jeff Schmid | |
| 12/08/2025 | 1600/1200 | *** | US | USDA Crop Estimates - WASDE |
| 12/08/2025 | 1800/1400 | ** | US | Treasury Budget |
| 13/08/2025 | 0130/1130 | *** |  AU | Quarterly wage price index |
| 13/08/2025 | 0600/0800 | *** |  DE | HICP (f) |
| 13/08/2025 | 0700/0900 | *** |  ES | HICP (f) |
| 13/08/2025 | 1100/0700 | ** | US | MBA Weekly Applications Index |
| 13/08/2025 | - | *** |  CN | Money Supply |
| 13/08/2025 | - | *** | CN | New Loans |
| 13/08/2025 | - | *** | CN | Social Financing |
| 13/08/2025 | 1430/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 13/08/2025 | 1430/1030 | ** | US | US DOE Petroleum Supply |
| 13/08/2025 | 1700/1300 | US | Chicago Fed's Austan Goolsbee | |
| 13/08/2025 | 1730/1330 | US | Atlanta Fed's Raphael Bostic |
