US: Headline CPI estimated to increase by 0.3% m/m in September – Danske Bank

Research Team at Danske Bank, suggests that in the US, the September CPI figures are due out and will be in the focus for the invetors.

Key Quotes

“Core inflation has moved sideways throughout 2016 looking at both the CPI and the PCE figures. This suggests that upward inflation pressure has been limited. Some of the dovish FOMC members (most notably Chair Janet Yellen) have explicitly mentioned that low inflationary pressure gives the Fed 'some running room'. Hence, we expect a lot of attention to be on whether core inflation will start to pick up in late 2016, as it will be a key determinant of whether or not we get a December rate increase.

Currently, we see limited signs that core inflation is about to increase sharply and we doubt that the picture will change much this year. We estimate core CPI increased 0.2% m/m in September, implying an unchanged CPI core inflation rate at 2.3% y/y. We estimate headline CPI increased 0.3% m/m in September (although it is a close call between 0.2% and 0.3% m/m), implying a headline inflation rate of 1.4% y/y, up from 1.1% y/y in August. The increase in headline CPI inflation is due mainly to a smaller negative contribution from energy prices.” 

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