US DATA: PPI Details Point To Broadly Neutral Impact On May Core PCE
Jun-12 12:43
- Our simple proxy for the impact of PPI details on core PCE in May came in at -0.01pps after an unrevised -0.088ps in April and +0.08pps in March.
- This looks at a range of health care services, airfares, portfolio mgt & invt advices, vehicle insurance and medical insurance.
One detail that was particularly in market focus:
- PPI portfolio management & investment advice: -0.8% M/M in May after an upward revised -6.3% (initial -6.6%).
- We'd seen some specific estimates ranging roughly between -4.5% and +4.5%
- It had a weight of 1.8% of core PCE in April, and assuming similar this month would drag only about -0.01pp off core PCE in May after a heavy -0.11p in April.
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FOREX: Initial Dip Lower for the USD Index Immediately Reverses Following US CPI
May-13 12:40
- Dollar index very briefly through session lows on the slightly softer-than-expected inflation figures from the US, most notable with USDJPY dipping from 148.15 to 147.87 following the release. However, the positive influence for equity indices, an in line supercore figure and the optimistic tone for the greenback on Monday appears to be superseding FX sentiment here. USDJPY pops straight back to a high of 148.27 before stabilising at pre-data levels.
BUNDS: A 12 ticks jump higher in Bund post US CPI
May-13 12:39
- Just a 12 ticks gain for the German Bund, fairly contained and is still short of the Intraday high of 129.71, printed just pre EU Cash Equity Open.
- This was just a 1 tenth lower print for the US CPI, and Govies are seeing some selling interest into the bid, but further upside traction in the contract would see the initial resistance at 130.05.
US DATA: Rental Inflation Surprises A Little Stronger, Supercore In Line
May-13 12:36
Rental inflation was stronger than expected again this month, although OER only just rounded to 0.4% M/M.
- OER: 0.36% M/M vs analyst average 0.32% (range 0.28-0.40) in April vs 0.40% in March and 0.28% in Feb.
- Primary rents: 0.34% M/M vs analyst average 0.30% (range 0.28-0.32) in April vs 0.33% in March and 0.28% in Feb.
The supercore print at 0.21% M/M was exactly in line with a consensus we had seen across four estimates.
- Core services excl OER & primary rents ('supercore'): 0.209% M/M after -0.241%. Latest 3mth av of 0.061%
- Core services excl all shelter: 0.151% M/M after -0.069%. Latest 3mth av of 0.114%
- Limited analyst estimates for ex OER & rents had averaged 0.21% M/M, ranging from 0.11 to 0.30
