- 13 Jun 2024
- ICICI Securities
INFLATION EASED IN MAY IN US
News: Inflation in US eased in May compared to the expectation. CPI on YoY basis increased by 3.3% in May 2024 after advancing 3.4% in April 2024. However, the index for shelter continued to rise at steady rate and rose 5.4% from year earlier accounting for over two thirds of total increase in all items less food and energy. On the other hand, gasoline prices declined in May. Core-CPI which excludes energy and food slipped to 3.4%, lowest since April 2021. Dollar and Yields moved lower yesterday after data showed that inflation in May rose less than expected, but pared losses after FOMC meeting. Dollar slipped to 104.68, 10-year treasury note slipped to 4.316% and 2-year treasury yield, which typically moves in step with interest rate expectations decline to 4.756%.
Views: Dollar is likely to slip further towards 102.0 level as ease in price pressure in May kept an anticipated September interest rate cut from the Fed on the table. US Dollar Index is likely to slip further till 102.0 level as long as it stays below 106.50 levels.
Impact: Positive