Research Team at RBC Capital Markets, suggests that the September CPI report in the US is the main releases today and the uptick in gasoline prices should help propel headline CPI up by 0.4%.
“While that would be the largest source of upside, core prices are also likely to rise 0.2%. Housing has been up at least 0.3% in three of the last four months and we look for another robust gain here. All in, this outcome would take headline CPI all the way up to 1.6% y/y from prior 1.1% while core remains at 2.3%. If oil prices come in near what is expected by futures markets, we should see headline inflation flirt with 2% by December. All else equal, this makes the case for the Fed hawks more compelling, although with a 75% probability attached to a Fed hike by year-end, forward rates appear fairly priced already.”