CPI data coming up at 1230GMT
Scotia on what to expect:
- Headline inflation is forecast to rise from 1% y/y in July to 1.4% principally due to forecast month-ago gains in core CPI combined with a mild assist from gasoline prices.
- Core CPI has risen by 0.6% m/m in seasonally adjusted terms in each of June and July and the reopening effect upon price pressures buoyed by stimulus is expected to repeat.
- If so, core inflation could also rise again; it bottomed at 1.2% y/y in June, climbed to 1.6% in July and is forecast to rise to over 1.7% in August.
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The market consensus for the headline is also 1.2% y/y
- core is 1.6%
For FX rates, it'll be risk sentiment driving again. Higher than expected inflation should impact to take some steam out of equity prices.
