In the run-up to the US CPI showdown, analysts at Nomura note that the concerns over rising inflation are excessive.
Key quotes
“US 10-year break-even inflation rate +14bps to 2.54% since the end of last month, the highest since 2012.”
“Nominal 10-year US yield remains little changed over the same period.”
“Many Fed officials still see the pickup in inflation as temporary and the rise in BEI isn't leading to talk of front-loading tapering.”
Market implications
The S&P 500 futures fall for the third straight day on Wednesday, as investors remain unnerved inflation data that is expected to show a jump in prices.
A potential acceleration in inflation revives the Fed’s tightening bets, weighing heavily on the market mood. Meanwhile, the US dollar index adds 0.12% on the day, at the press time, holding comfortablly above 90.00.
