US CPI monthly
  • Prior was +7.7%
  • m/m CPI +0.1% vs +0.3% expected
  • Prior m/m reading was +0.4%
  • Real weekly earnings +0.2% vs -0.1% prior (prior revised to 0.0%)

Core inflation:

  • Ex food and energy +6.0% vs +6.1% y/y expected
  • Prior ex food and energy +6.3%
  • Core m/m +0.2% vs +0.3% exp
  • Prior core m/m +0.4%

The previous report surprised to the downside and led to a +7% rally in the Nasdaq and a big drop in the US dollar. This isn't quite as big of a surprise but it's in the same direction. You can argue that the market sniffed this one out with a big rally in equities today and in stocks ahead of this release. There was a suspicious move in S&P 500 futures just before the release, which you can see on the one-minute chart. That's probably just a sign of illiquidity.

SPX 1 m

In FX, the US dollar has cratered with the market showing increasing confidence that the Fed won't make it above 5% on Fed funds. The terminal rate is now down to 4.86%, which suggests a pause at 4.75-5.00% and that will certainly go directly against some of tomorrow's Fed dots.

USD/JPY is down to 135.75 from 137.35, which is 160 pips. The moves elsewhere are about half that but still substantial.

SPX 15 mins

The details of the report show shelter running hot with owners-equivalent rent was up 0.7% vs +0.6% a month ago.

  • Used cars -2.9% m/m vs -2.4% m/m prior
  • Food +0.5% m/m vs +0.6% m/m prior
  • Energy -1.6% vs +1.8% m/m prior
  • Gasoline -2.0% m/m
  • Fuel oil +1.7% m/m +19.8% m/m prior
  • New vehicles 0.0% m/m vs +0.4% prior
  • Apparel +0.2% vs -0.7% prior
  • Medical care +0.2% m/m vs 0.0% prior

If you take away rents, (which are laggy) and food, it's tough to find any inflation.