Prior +3.4%Core CPI +3.7% vs +3.5% y/y expectedPrior +3.5%Services CPI +4.7% vs +4.6% y/y expectedPrior +4.7%
The market was pricing 53 bps of easing by year-end ahead of the release. These figures are much higher than expected as the highest forecast was 3.6% for the Core measure. In terms of market pricing, we might see less chances of a rate cut in August, but the base case was for two rate cuts by year-end, so that could still happen in the three meetings after the August one.
This article was written by Giuseppe Dellamotta at www.forexlive.com.