Is An Underwhelming CPI Report A Bullish Gamechanger?

What’s in Today’s Report:

  • Is An Underwhelming CPI Report A Bullish Gamechanger?
  • EIA Analysis and Oil Market Update

Futures are slightly lower following Wednesday’s rally and ahead of this morning’s CPI report.

Governments and central banks pushed back a bit overnight on the global hawkish narrative as the European Commission predicted inflation would return to 1.7% yoy in 2023 while the Swedish National Bank was dovish in its commentary (no rate hikes or QT anytime soon).

Economic data was sparse overnight although Chinese money supply did beat estimates, reflecting the continued accommodation in that economy.

Today the key event is the CPI Report (E: 0.5% m/m and 7.3% y/y) and an in-line or smaller than expected increase will likely spur a further rally in stocks as markets try and price in a “not as hawkish as feared” Fed (although we’d be skeptical of that rally – more on that in the Report).  We also get Jobless Claims (E: 230K) and one Fed speaker this evening: Barkin at 7:00 p.m. ET.