Preview of the inflation data due 12 December 2018 at 1330GMT
Deutsche bank:
- the inflation data this week will be particularly important for translating the dovish tinge to recent Fedspeak into potential changes in the expected path for the fed funds rate in the December 19 SEP.
- While the 3.7% drop in seasonally adjusted gas prices in November will likely weigh on Wednesday's headline CPI (Unchanged forecast vs. +0.3% previously), core CPI (+0.2% vs. +0.2%) should remain steady.
- Assuming our unrounded core CPI forecast (+0.22%) is close to the mark, year-over-year growth would rise about 10 basis points (bps) to 2.25%, undoing about half of the slide since the July post-recession peak (2.33%).
Barclays:
- We forecast headline CPI to have been flat on the month and to have increased 2.2% y/y.
- Excluding the volatile food and energy components, we forecast inflation to have risen 0.2% m/m and 2.3% y/y.
- We expect headline CPI to be dragged down by the negative energy impulse for much of next year and to underperform core CPI.
- we maintain our view that core CPI will rise gradually to reach 2.5% by the end of 2019 reflecting GDP growth running above potential, labor markets continuing to tighten and wage inflation moving higher modestly
