What is the distribution of forecasts for the US CPI? | investingLive

The ranges of estimates are
important in terms of market reaction because when the actual data deviates from the
expectations, it creates a surprise effect. Another
important input in market’s reaction is the distribution of forecasts.

In fact, although we can have a range of
estimates, most forecasts might be clustered on the upper bound of the
range, so even if the data comes out inside the range of estimates but
on the lower bound of the range, it can still create a surprise effect.

CPI Y/Y

• 3.2% (2%)
• 3.1% (76%) – consensus
• 3.0% (16%)
• 2.9% (6%)

CPI M/M

• 0.5% (5%)
• 0.4% (63%) – consensus
• 0.3% (29%)
• 0.2% (3%)

Core CPI Y/Y

• 3.2% (11%)
• 3.1% (83%) – consensus
• 3.0% (6%)

Core CPI M/M

• 0.4% (10%)
• 0.3% (82%) – consensus
• 0.2% (8%)

As
always, the focus will be on the Core figures. We can notice that we
have a strong consensus for 3.1% for the Core Y/Y and 0.3% for the Core M/M. Given that we had a notable dovish repricing triggered by Trump’s tariff threat on China, an upside surprise should trigger the strongest reaction.

A soft report should have less room for a dovish repricing but it will still weigh on the market, so we will likely see some dollar weakness and upside in equities. Data in line with expectations would be the most boring outcome but will likely keep the positive risk sentiment going ahead of the US-China negotiations.