US CPI data for July is due on 10 August 2018 at 1230GMT

Headlines:

  • CPI m/m expected 0.2%, previous 0.1%
  • CPI excl food and energy m/m expected 0.2%, previous 0.2%
  • CPI y/y expected 2.9%, previous 2.9%
  • CPI y/y excl food and energy m/m expected 2.3%, previous 2.3%

Previews via …

Nomura:

  • We expect a 0.3% (0.260%) m-o-m in core CPI inflation in July.
  • If realized, the 12-month change rate would remain at 2.3% (2.350%).
  • Solid readings of the persistent components of core CPI in June suggest that the underlying trend of core inflation remains unchanged. We expect continued steady inflation of rent of primary residence and owners' equivalent rent (OER), which account for about 40% of core CPI. Moreover, we think the inflation of used vehicle prices will show a steady increase in July after a sharp m-o-m jump in June. We see some upside risk from volatile components that lowered core inflation in June. In particular, we think apparel prices and lodging away-from-home prices could increase strongly in July after sharp declines in June, given their strong mean-reverting tendencies.
  • Among non-core components, we think food prices rose a steady pace of 0.2% m-o-m. Energy prices likely declined somewhat considering lower prices of retail gasoline and other fuel prices in July relative to June levels. Altogether, we expect a 0.2% (0.227%) increase in the headline CPI in July, which would be equivalent to 3.0% (2.993%) y-o-y growth.

RBC:

  • We look for a notable sequential advance in both headline and core CPI in July of about 0.3%.
  • These would move the y/y rates to 3.0% and 2.4%, respectively.
  • Recall that shelter prices rose just a modest 0.1% in June and were suppressed by a quirky 4.1% decline in the hotels/motels sub component. Some mean reversion here suggests a significant contribution from this critical 33% of the headline CPI pie (and 42% of the core) is in the offing.
  • Energy should weigh only modestly on the headline. Gasoline prices slid about 1% NSA in July, which is just slightly worse than the seasonal norm.