- 12 Jul 2024
- ICICI Securities
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INFLATION IN US EASED MORE THAN EXPECTED IN JUNE
News: Inflation in US eased more than expectation in June amid cheaper gasoline and moderating rents. CPI on YoY basis increased by 3.0% in June 2024, smallest gain since June 2023 after advancing 3.3% in May 2024. Core-CPI which excludes energy and food slipped to 3.3% in June from 3.4% in May 2024, lowest since April 2021. CPI on MoM basis declined 0.1% last month, first drop since May 2020. Core CPI on MoM basis increased 0.1% in June after climbing 0.2% in May 2024. Shelter prices rose 5.2% from year earlier and still accounting for over two thirds of total increase in all items less food and energy. Services less energy services index eased to 5.1% in June from 6.2% same month year ago. The energy index increased by 1.0% for the 12 months ending June, and the food index increased 2.2% over the last year. Dollar and Yields moved lower yesterday after data showed that inflation in June rose less than expected. Dollar slipped to 104.50, 10-year treasury note slipped to 4.214% and 2-year treasury yield, which typically moves in step with interest rate expectations decline to 4.519%.
Views: Dollar is likely to slip further towards 102.0 level as substantial ease in price pressure in June along with labor market showing more signs of cooling, 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 106.20 levels.
Impact: Positive