ANZ Research previews next week's US April CPI report on Tuesday May-12.

"April Consumer Price Index (CPI) data will continue to show accelerating annual headline inflation, reflecting higher energy prices. We estimate headline CPI rose 0.8% m/m (3.9% y/y) in April, matching the 0.8% m/m (3.3% y/y) pace in March. If data are in line with our forecasts, headline inflation would be at its highest since mid-2023. We expect core CPI rose at a modest 0.2% m/m pace (2.6% y/y) in April," ANZ notes.

"Domestic gasoline prices in the US have surged nearly 40% since February. We expect its direct impact will push transportation and related fuel prices higher. Meanwhile, underlying drivers of services inflation such as wages and rents have remained soft. This underpins our view that headline and core inflation will show divergent trends," ANZ adds.