Market lowers expectations for Wednesday's CPI data
All of this is helping to set up further downside expectations for Wednesday’s CPI, which is expected to see a (rounded) 0.3% MoM / 5% YoY gain in core CPI based on Street consensus. Certain sell-side research (such as GS) is expecting further downside towards 0.2% MoM in core, thanks to large downward contributions from car prices and shelter OER.
The friendly data backdrop helped spark a relief rally in global fixed income after its recent sell-off, with 5y yields falling -11bp on the day and helping equities to edge out a small gain after some early weakness, after an otherwise quiet summer trading day.
