In today’s briefing:
- US CPI Inflation 3.27% y-o-y (consensus 3.4%) in May-24
- CX Daily: Turning Research Into Revenue – China’s Quest to Bring Lab Inventions to Market
- Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China
- UK: Structural Trend Imputation
- EM Watch: Is China making a fool out of Western metals speculants?
- Thailand Policy Rate 2.5% (consensus 2.5%) in Jun-24
- US CPI Review – Admittedly a soft report, but NOT the new normal
- India CPI Inflation 4.75% y-o-y (consensus 4.9%) in May-24
- China CPI 0.3% y-o-y (consensus 0.4%) in May-24
US CPI Inflation 3.27% y-o-y (consensus 3.4%) in May-24
- US CPI inflation for May 2024 was reported at 3.27% year-on-year, the lowest growth rate since February 2024, and slightly below the consensus estimate and the previous month’s figure.
- Despite a decrease in headline inflation, core CPI inflation remained stable at 3.4% year-on-year.
- This stability in core CPI inflation is due to persistent producer price pressures, indicating sustained underlying inflationary pressures.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
CX Daily: Turning Research Into Revenue – China’s Quest to Bring Lab Inventions to Market
- Cover Story: Turning research into revenue – China’s quest to bring lab inventions to market
- Peru amends law allowing Cosco Shipping to retain exclusive rights to operate Chancay Port
- In Depth: How Hong Kong could help craft mainland policies for digital assets
Iron Ore: Disappointing Data Pushed Price Down to 105, Bounce To 120 On Further Stimulus From China
- Iron ore continued to operate in its band from 95-130 USD/ton over the last few years, with a recent drop from 120 USD/ton to 105 USD/ton on tepid China data.
- With incremental news on China’s stimulus in the property and infrastructure sectors, we remain confident that iron ore will return to 120 USD/ton in the short term.
- We also remain bullish on the 65-62 spread, which has expanded to the teens. Rio Tinto Ltd (RIO AU) and Vale (VALE US) are good plays on the spread.
UK: Structural Trend Imputation
- Sustaining the Q1 rebound in April suggests economic trends have improved in 2024 to about 0.3% q-o-q for demand and 0.4% for supply amid slightly rising unemployment.
- The fading positive supply shock from falling energy prices should slow those trends before policy aligns at neutral such that both trends converge at 0.3% q-o-q in 2025.
- Easing before expectations have re-anchored with the target risks excessively high inflation, compounding the UK risk of rates reversing higher relative to other countries.
EM Watch: Is China making a fool out of Western metals speculants?
- Hot on the heels of watching Powell’s press conference, which pushed back slightly against renewed rate-cut optimism, it’s clear that the Fed is playing a cautious game.
- Despite the soft inflation data this morning, they significantly changed the dot plot.
- They likely believe the CPI report was noisy due to a sudden deflation in transportation.
Thailand Policy Rate 2.5% (consensus 2.5%) in Jun-24
- The Bank of Thailand maintained its Policy Rate at 2.5%, with a 6 to 1 vote, reflecting a cautious approach amid structural challenges and ongoing economic uncertainties, particularly in the export sector.
- It projects economic growth at 2.6% in 2024 and 3.0% in 2025, driven by strong domestic demand, tourism recovery, and accelerated government disbursements, while structural impediments continue to weigh on export performance.
- Inflation should gradually increase towards the target range by the fourth quarter of 2024, with headline inflation projected at 0.6% for 2024 and 1.3% for 2025, necessitating careful monitoring of external and domestic factors that could influence inflation dynamics and future policy decisions.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
US CPI Review – Admittedly a soft report, but NOT the new normal
- The CPI report today was admittedly softer than our initial hawkish forecasts, with headline coming in unchanged at 0.0% MoM vs 0.1% expected while core came in to the soft side of 0.2% MoM vs 0.3% expected.
- Our anticipation of rising goods-flation didn’t play out fully, and while shelter re-accelerated as we forecasted, core services disinflated heavily in May due to auto insurance costs declining.
- The main culprit behind the dovish CPI report was the sudden drop in Motor Vehicle Insurance (chart 2.b), which has so far been printing at trend MoM levels around 1-1.5%, lifting headline inflation by 0.03-0.05% consecutively.
India CPI Inflation 4.75% y-o-y (consensus 4.9%) in May-24
- India’s CPI inflation for May 2024 was 4.75% year-on-year, lower than the predicted 4.9%, and the lowest since May 2023.
- There has been a slowdown in CPI inflation and subdued wholesale price movements, especially in the manufacturing sector.
- This suggests a potential easing of inflationary pressures, which could provide economic relief and lead to adjustments in monetary policy.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
China CPI 0.3% y-o-y (consensus 0.4%) in May-24
- China’s CPI remained stable at 0.3% year-on-year in May 2024, indicating modest inflationary pressures.
- Despite this stability, the CPI was slightly above the one-year average.
- Other economic indicators, such as declining new house prices and robust monetary and credit growth, suggest potential future inflationary dynamics.
This content is sourced through publicly available sources and has been machine generated. Information displayed is for general informational purposes only.
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