#junecpiwarshtestimonybankearningssameweek
June CPI drops tomorrow at 8:30 AM. Here is what the
Street expects and what our research says actually matters.
The
consensus:
Core
CPI expected at +0.26% month over month, up from May's +0.20%. Annualized core expected to hold at
2.9%.
Headline
CPI
expected to contract -0.15% month over month after May's +0.5% print. Annualized headline consensus 3.8%, down from 4.2%.
The debate is already heated. BofA expects a firm 0.29% core print driven by services and argues it strengthens the case for near-term rate hikes. Citi expects slower shelter inflation and minimal energy passthrough, arguing the market will price out hikes altogether.
The upside risks: motor vehicle insurance rebounding after a 1.7% decline in May. World Cup impact on hotels, airfares, and car rentals. Housing disinflation waning as price hikes normalize.
The downside risks: less tariff impact after the IEEPA decision. Goldman forecasting declines in both new and used vehicles. Computer and software prices potentially cooling as retail memory prices flattened month over month.
Now here is what the data says about trading it.
On April 9 we published a study of 266 CPI releases over 22 years. The findings have not changed. CPI day returns are statistically indistinguishable from any other day. Return difference versus non-CPI days: +0.03% with p = 0.65. All that positioning is for a day that behaves like a random Tuesday.
$CL
$NMR
$BSV
June CPI drops tomorrow at 8:30 AM. Here is what the
Street expects and what our research says actually matters.
The
consensus:
Core
CPI expected at +0.26% month over month, up from May's +0.20%. Annualized core expected to hold at
2.9%.
Headline
CPI
expected to contract -0.15% month over month after May's +0.5% print. Annualized headline consensus 3.8%, down from 4.2%.
The debate is already heated. BofA expects a firm 0.29% core print driven by services and argues it strengthens the case for near-term rate hikes. Citi expects slower shelter inflation and minimal energy passthrough, arguing the market will price out hikes altogether.
The upside risks: motor vehicle insurance rebounding after a 1.7% decline in May. World Cup impact on hotels, airfares, and car rentals. Housing disinflation waning as price hikes normalize.
The downside risks: less tariff impact after the IEEPA decision. Goldman forecasting declines in both new and used vehicles. Computer and software prices potentially cooling as retail memory prices flattened month over month.
Now here is what the data says about trading it.
On April 9 we published a study of 266 CPI releases over 22 years. The findings have not changed. CPI day returns are statistically indistinguishable from any other day. Return difference versus non-CPI days: +0.03% with p = 0.65. All that positioning is for a day that behaves like a random Tuesday.
$CL
$NMR
$BSV