CPI should slip significantly lower

Forecasts are calling for a steep decline in inflation by 0.9% from month to month.

Good Morning.

Market Rundown:

The dollar is down 18. Bonds are slightly stronger. Gold is up $4. Silver is up 10c. Stocks are up slightly at about 30bps on average. Oil is up 20c. Crypto is up 20bps only today. Grains are mixed

CPI Comment:

• Forecasts are calling for a steep decline in inflation by 0.9% from month to month.

• Services inflation remains very sticky according to the 3 banks

• Goods inflation which continues to carry the day, is somewhat bottoming due to energy prices popping a little, but nothing to fret about yet.

ZeroHedge notes in their prem report:

The annualized 3, 6 and 12 month core readings are all still struggling to gain much downward momentum below 5% at the moment.

So the data is assumed to be friendly, the trend is lower, the core is still lagging due to services. Which leaves us with this:

CORE CONSENSUS

• Core CPI MoM is 0.3% (0.4% prior)

• Core CPI YoY 5.0% (5.3% prior).

HEADLINE CONSENSUS

• Headline MoM of 0.3% (prior 0.1%)

• Headline YoY 3.1% (prior 4.0%).

Here are the big 3 playbooks