US CPI preview: expect a moderate increase - Nomura

Analysts at Nomura offered their outlook for the forthcoming US CPI data.

Key Quotes:

"We expect a moderate increase in April CPI. Our forecast for headline CPI inflation is 0.3% (+0.312%) m-o-m which translates into a 2.5% (2.544%) gain on a y-o-y basis."

"As for energy and food components, gasoline prices were up by around 3.0% m-o-m in the month as the driving season started."

"Food prices likely increased by a modest 0.3% m-o-m, driven by higher prices at both grocery stores and restaurants."

"Excluding food and energy, we expect core CPI to show a trend-like increase of 0.2% (0.169%) m-o-m in April. This would translate to y-o-y core CPI inflation of 2.2% (2.193%), up slightly from 2.1% in March."

"Our forecast is based on the view that inflation of core goods prices remained weak despite growing concerns over trade disputes and higher commodity prices. Core service prices likely continued to increase at a steady pace."

"Although the lagged effect of the weaker US dollar last year could have pushed up core goods prices, the pass-through of exchange rates to domestic consumer goods prices has been very weak. In terms of y-o-y changes, after March saw positive base effects, the pace of CPI inflation acceleration will likely become more gradual. Our forecast for CPI NSA is 250.7454."