The dollar slipped a bit following the in-line CPI outcome, taking EURUSD to 1.1800 highs from near 1.1780, and USDJPY to 110.29 lows from 110.40. Equity futures indicate a flat Wall Street open, improved from earlier lows. Yields were little changed.
U.S. CPI rose 0.2% in May, with the core up 0.2%. There were no revisions to April where consumer prices were up 0.2% overall, and 0.1% excluding food and energy. The annual pace accelerated to 2.8% y/y for the headline from 2.5% y/y, and 2.2% y/y for the core versus 2.1% y/y. Energy prices were 0.9% higher following the 1.4% April bounce, and are up 11.7% y/y. Transportation prices edged up 0.4% versus the prior 0.2% gain. Services costs rose 0.2% from 0.1%. Housing costs were up 0.2% from 0.3%, with owners’ equivalent rent 0.2% higher from 0.3%. Apparel prices were unchanged after a 0.3% gain. Medical care costs rose 0.2% after April’s 0.1% gain. Education and computer prices rose 0.4% from unchanged. Tobacco prices were up 0.4% from 1.3%. Data are in line with expectations and shouldn’t alter outlooks on the FOMC.
CPI came in right on the nose for May, though yields remained elevated ahead of the procession of central bank events later this week.
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