CPI preview: headline CPI to increase 0.2% - Nomura

Analysts at Nomura explained that they expect headline CPI to increase 0.2% (0.227%) m-o-m in July (Consensus: 0.2%), pushing up its y-o-y change to 3.0% (2.993%, Consensus: 2.9%) from 2.9% previously.

Key Quotes:

"Excluding food and energy prices, we expect a reversal of declines in volatile items to push up July core CPI. As a result, we expect a small acceleration of core CPI inflation to 0.3% (0.260%) m-o-m in July (Consensus: 0.2%) from 0.2% (0.162%) previously. On a y-o-y basis, our forecast would lead to a 2.3% (2.349%) increase in core CPI (Consensus: 2.3%)."

"Although our rounded forecast for the m-o-m change in core CPI is higher than the market consensus forecast of 0.2%, most of the expected pick-up is due to short-term fluctuations. We think that the sustainable pace of core CPI inflation is around 0.18-0.22% m-o-m. Taking into account food and energy prices, our forecast for CPI NSA is 252.112 (Consensus: 251.963)."