US CPI data for August is due Thursday - preview
Coming up at 1230GMT on 12 September 2019 (the same time as the ECB press conference with Draghi is scheduled to begin)
Preview via Scotia:
- forecast is for headline CPI unchanged at 1.8%
- core CPI forecast up to 2.3% y/y
- Since the Fed's preferred core PCE gauge (1.6% y/y in July) tends to undershoot core CPI fairly steadily by several tenths of a percentage point over time, the Fed's efforts to achieve the symmetrical 2% inflation target will be minimally affected. In addition, there are measurement differences between core CPI and core PCE that don't assure that changes in one lead to changes in the other.
- US retail petrol prices decreased by 3%mom in August. The fall in petrol prices will keep headline CPI inflation at 1.8%/yr.
- Core inflation will stay around 2.2%yoy, supported by solid growth in consumer demand
- market is anticipating only a moderate lift in the August CPI, which tends to favour those sitting on the dovish side of the Fed table
- While trade risks from the trade war with China are dominating talks, some Fed officials have also said persistently weak inflation is one reason to consider more stimulus.