Steack-flation...Cattle Futures have once again closed at an all-time high. Steaks are going to be getting expensive!
Source: Barchart
Brent oil vs. Citigroup global inflation surprises index
Oil price usually lead inflation 👇 The recent uptick in oil price will be probably not enough to materially change inflation surprises, but should oil continue to go up it would start to have an impact. Source: Michel A.Arouet
Are FED priorities shifting?
Mentions of inflation in the Fed's Beige book were the fewest since Jan 2022...Meanwhile, mentions of recession jumped to the highest level since at least 2018. The fact that there have been so many mentions of a word which as recently as 2020 and 2021 barely existed in the Beige Book vocabulary could give an indication what the Fed is most worried about today. Source: www.zerohedge.com
Inflation has been a boost to sp500 companies top-line growth
Now that inflation starts to cool down, could it work the otehr way around? here's the view from Morgan Stanley: "Our boom/bust framework would suggest inflation as it relates to corporate earnings (i.e., pricing) falls toward zero or even below. This is likely to have a significant impact on sales growth and, consequently, on earnings growth as negative operating leverage takes hold." Source: TME
PCE Deflator, the FOMC's favorite inflation number, show a rise as expected with the YoY at 3.3% (from 3%) and the core at 4.2% (from 4.1%)
Jobless claims at 228k (235k expected) showing continued strength ahead of Friday's NFP report Source: Ole S.Hansen
Disinflation pause?
Eurozone inflation remained stuck at 5.3% in Aug, higher than the 5.1% that economists expected. Core inflation, which excl volatile energy, food, alcohol & tobacco prices & closely watched by ECB as measure of underlying inflation, tumbled to 5.3% in Aug from 5.5% in July, matching expectations. Source: HolgerZ, Bloomberg
French CPI a little hotter than expected, rising 50bp in August
This was all due to energy (including higher regulated prices) and the end of the summer sales, but services inflation is still easing driven by transports and "other services". FRENCH CPI YOY NSA PRELIM ACTUAL 4.8% (FORECAST 4.6%, PREVIOUS 4.3%) FRENCH CPI MOM NSA PRELIM ACTUAL 1% (FORECAST 0.8%, PREVIOUS 0.1%) FRENCH HICP MOM PRELIM ACTUAL 1.1% (FORECAST 1%, PREVIOUS 0.0%) FRENCH CONSUMER SPENDING MOM ACTUAL 0.3% (FORECAST 0.3%, PREVIOUS 0.9%) Source: Bloomberg
Germany's inflation drops to 6.1% in Aug from 6.2% in July while Core inflation stagnates at 5.5%
BUT 6.1% headline reading was 10 basis points above market predictions as energy prices accelerated to 8.3% in Aug from 5.7% in Jul. Food price inflation slowed to 9% in Aug from 11% in July. Source: HolgerZ, Bloomberg
