Inflation
The UK’s latest cost of living relief may lower measured inflation, but it risks worsening concerns about fiscal credibility. June CPI was cooler than expected, falling to a 15-month low at 2.6%. Yet, this is not a clean disinflation story. UK inflation has…
Our FICC strategists stay overweight global inflation-linked bonds (ILBs), betting that markets underprice the inflation risk from energy and shipping disruptions. Within this stance, our colleagues view US and UK ILBs as particularly attractive relative to…
In this Strategy Insight, we assess how Middle East-related energy and shipping disruptions are shaping the global inflation outlook and review the implications for inflation-linked bond markets. We also examine the outlook for core inflation and the resulting implications for central bank policy and duration positioning.
Canadian June inflation came in colder than estimates, reinforcing the case for fading CORRA pricing. Headline CPI ticked down to 2.8% y/y, within the Bank of Canada’s 1%-to-3% target range. The BoC’s preferred core measures also cooled, with median down to…
The June PPI report came in cooler than estimates, reinforcing the view that pipeline inflation pressures are easing and the Fed can stay on hold for now. Headline PPI contracted 0.3% m/m, lowering the annual rate to 5.5% y/y from 6.5%. The core measure,…
Australia's June NAB Business Survey points to a cooling economy, reinforcing the case for an extended RBA pause. Business conditions held at +3 for a third consecutive month, while business confidence, the more forward-looking measure, rebounded from -14 to…
The June US CPI report was cooler than expected, reinforcing the case for the Fed to stay on hold in July. Headline CPI contracted 0.4% m/m, the first monthly decline since June 2024 and the most severe since April 2020, cooling the annual rate to 3.5% y/y…
Indian headline CPI rose to 4.4%, limiting the RBI’s scope to ease and creating a less supportive backdrop for Indian assets. The increase pushed inflation above the RBI’s 4% target, though it remains within the tolerance band. Higher fuel and food prices…
Subdued Swedish inflation should keep the Riksbank on hold. June headline CPIF eased to 1.3% y/y (0.3% m/m) from 1.5% (0.9%), and CPIF excluding energy slowed to 0.4% y/y (0.6% m/m) from 0.5% (0.7%). Both were marginally above estimates, but disinflation has…
The June ISM Services survey was in line with consensus and reinforced the picture of a US economy that is neither overheating nor cooling significantly. The headline index ticked down to 54.0 from 54.5. The underlying picture was somewhat mixed, with new…