As highlighted by Tavi Costa ->
Despite the recent surge in copper prices, when adjusted for true inflation, the metal is trading at levels we saw in the early 1990s. Will copper prices adjusted for gold still be this low by the end of this decade if we proceed with one of the largest infrastructure developments we've seen in the last 100 years??? Source: Crescat Capital, Bloomberg
Could headline inflation start following the rebound in commodities prices?
Source: Tavi Costa, Bloomberg
Today’s inflation numbers are seen as a relief by investors… and the FED
Indeed, the just released data shows that US inflation cooled down in April for the first time in 6 months, following several reports of upside surprises. While yoy headline inflation is in-line with expectations (+3.4pct) the positive surprise came from the MoM number (+0.3pct) which is BELOW estimates (+0.4pct). Core inflation number MoM came in as expected (+0.3pct). The core yoy number (+3.6pct as expected) is at the lowest level since April 2021. Bottom-line: this report is bullish equities, bonds, gold and cryptos as it indicated that the disinflation trend might have further to go. Still, we believe that the Fed might wait for some confirmation before turning dovish. We note that the SuperCore (core ex-shelter) rose 0.5pct MoM to 5.05pct YoY. Source: CNBC
BREAKING: April PPI inflation RISES to 2.2%, in-line with expectations of 2.2%
Core PPI inflation was 2.4%, in-line with expectations of 2.4%. PPI inflation is now up for 3 straight months for the first time since April 2022. This is the highest PPI reading since April 2023. Note that revisions from last month’s PPI left people feeling it wasn’t as “hot” as initially thought on headline numbers. Source: Charlie Bilello
Markets are currently anticipating the first Fed cut in September and a potential second cut in December.
This week's US inflation data could shift these expectations backward or forward depending on how the data comes in. Source: Markets & Mayhem
JUST IN: Argentina to print its first 10,000-peso note as a result of hyper-inflation.
Source: Radar
GS: much of the remaining hot price inflation is also lagged catch-up inflation.
This applies to housing, health care, and car insurance and other regulated prices Mike Zaccardi, CFA, CMT
Stagflation fears are back.
Source: BofA Global Research; Mike Zaccardi
