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Something for your Espresso: Fuel, gas and Credit cards

The CPI report today will reflect an equilibrium of countering trends: Energy is back in the limelight on both sides of the pond just about when the base effects are turning unfavorable
2023-08-10

Good morning from Europe!

Big day today with the US CPI release- one we have discussed quite a bit internally. Structurally we are clearly at a disinflationary juncture with broader disinflationary momentum spreading, and on the back of the print in China yesterday JP Morgan estimates that core goods inflation spillover to the rest of the world will equal to ~ -70bps in H2. The divergence here is that while the inherent momentum in the economy is clearly cooling, energy is starting to run hot:

Chart 1: Generic Oil Future

The CPI report today will reflect an equilibrium of countering trends: Energy is back in the limelight on both sides of the pond just about when the base effects are turning unfavorable

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