UBS on US CPI
The October CPI report, the last the Fed will have in hand before the FOMC meets on Dec. 8-9, will be released Tuesday. Economist Alan Detmeister sees headline CPI inflation at 0.26% vs. 0.29% consensus and UBS Nowcast view of 0.32%. For core CPI, Alan expects 0.23% vs. 0.24% consensus and 0.22% UBS Nowcast. That would mark a notable slowdown from September. A slowdown in gasoline prices will likely keep the headline tame, while declining used vehicle prices will weigh on the core. The PPI data is due out Friday, and in between the Veteran's Day holiday shutters bond markets on Wednesday. That is a three-day gap between the October CPI release and the PPI release that allows for accurate translation into estimates of PCE prices. Although the PPI components are less influential overall than the CPI components, they have the potential to surprise, so be wary of considering too heavily the October PCE price estimates until the data is in.
The October CPI report, the last the Fed will have in hand before the FOMC meets on Dec. 8-9, will be released Tuesday. Economist Alan Detmeister sees headline CPI inflation at 0.26% vs. 0.29% consensus and UBS Nowcast view of 0.32%.
For core CPI, Alan expects 0.23% vs. 0.24% consensus and 0.22% UBS Nowcast. That would mark a notable slowdown from September. A slowdown in gasoline prices will likely keep the headline tame, while declining used vehicle prices will weigh on the core.
The PPI data is due out Friday, and in between the Veteran's Day holiday shutters bond markets on Wednesday. That is a three-day gap between the October CPI release and the PPI release that allows for accurate translation into estimates of PCE prices. Although the PPI components are less influential overall than the CPI components, they have the potential to surprise, so be wary of considering too heavily the October PCE price estimates until the data is in.