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May 15 - 12:55 AM

Danske: What We Expect from April CPI Print on Wed?

By eFXdata  —  May 14 - 04:30 PM

Synopsis: Danske Bank presents its forecast for the upcoming US Consumer Price Index (CPI) for April, highlighting potential nuances in the inflation data that could significantly influence market behavior and Federal Reserve policy expectations.

Key Points:

  • April CPI Forecast: Danske expects a +0.4% month-on-month seasonally adjusted increase in headline CPI and a +0.3% increase in core CPI, aligning closely with market consensus.
  • Impact of Core CPI Components: The report underscores the importance of details within the core CPI, particularly non-housing services inflation, which previously drove a notable market reaction similar to conditions seen in June 2022.
  • Fed Policy Expectations: Based on the CPI outcome, Danske anticipates the Federal Reserve may proceed with two rate cuts this year, with prevailing risks suggesting a downward adjustment in short-term US rate pricing.

Conclusion: Danske Bank advises careful monitoring of the inflation data's details, particularly the non-housing services segment, which could trigger significant reactions in financial markets.

Source:
Danske Research/Market Commentary

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