Solid headline and core CPI in the US, ZEW index lower than expected in Germany
US: CPI (May): 0.2% m/m as expected (prior: 0.2%)
- The headline inflation rose to 2.8% y/y in May from 2.5%, which is partly due to the rally in energy prices. The core CPI was also solid (2.2% y/y as expected), which will keep the Fed on course to raise interest rates tomorrow.
- At the core level, goods prices remained in deflation territory particularly in non-food consumer items and autos (-0.9% y/y). Core services inflation was in line with its recent trend and remains anchored by shelter inflation.
US: NFIB Small Business optimism (May): 107.8 vs 105 expected (prior: 104.8)
- The healine was very strong, coming in at 107.8 - the highest level of small business optimism since 1983.
- Price indicators in the survey were also very strong with average selling prices at a new cycle high and those reporting a rise in worker compensation at a 18-year high.
UK: Unemployment rate (ILO) (Apr): 4.2% as expected (prior: 4.2%)
- Jobless claims change (April): -7.7k after +28.2k (revised from +31.2k)
- Core average weekly earnings 3m/y: 2.8% vs 2.9% expected (prior: 2.9%)
- Wage growth slowed following negative base effects of last year. Core and headline growth slowed and continue to signal limited inflationary pressures.
Germany: Zew (Jun): 80.6 vs 85 expected (prior: 87.4)
- Investor sentiment continues to point to a slowdown. Expectations fell by 7.9pts (prior) to -16.1.
- Survey participants were mostly concerned about the political situation in Italy and further protectionist measure the US administrative.