Today’s CPI data for June (consumer inflation) was better than expected in all categories. Month-over-month, year-over-year, include/exclude food an energy… all lower than forecast and lower than May, except for the MoM at 0.2% vs. 0.1%. Monthly CPI Ex Food and Energy, at 0.1576%, was the lowest reading since August of 2021. And Yearly CPI Ex Food and Energy was 4.829%, its lowest reading since November 2021.
The buzzwords ‘disinflation’ and ‘soft landing’ are making the rounds following the data release. Fed policymakers are no doubt relieved to see inflation take a measurable step back.
The U.S. Dollar is lower vs. all majors following the inflation data. The biggest declines are -1.58% vs. NOK, -1.51% vs. SEK, -1.20% vs. AUD, -1.15% vs. NZD, -0.93% vs. JPY, and -0.92% vs. CHF. The dollar index is -0.70% at 101.014, just fractions away from this year’s low at 100.82.
USD/MXN broke below weekly support near 17.0000 and is trading at a fresh multi-year low approaching 16.8000, the strongest peso since January 2016.
U.S. Treasury yields are lower in all tenors, the 3-year leading the way -0.138%. Fed Funds Futures continue to price in a 88% probability of a 25 basis-point hike at the FOMC’s meeting on July 26th.
Global equities are higher. Oil is 1.46% and gold is 1.23% at $1,955.50/oz, its highest since June 20th.
