Helena Lyng Blak
33 weeks ago

Andreas Steno is Anticipating Input Costs Shocker

On the back of the hawkish CPI surprise, financial analyst Andreas Steno finds PPI consensus “amazingly low.”

U.S. Inflation Trends: A Hawkish Outlook

“The US inflation report made for hawkish reading,” says financial analyst Andreas Steno of Steno Research.

He expresses particular concern over "rising input costs spilling over to a cyclical re-acceleration of goods inflation into the spring at the worst possible timing for the Fed." This observation points to a potential misalignment between anticipated economic conditions and the realities faced by policymakers.

He elaborates on these concerns, stating, "If we look at our input cost monitor, we are a bit puzzled that the consensus for input costs is around 0.3% MoM again, which is out of whack with our observed price trends in the input basket over the course of March." This discrepancy suggests that market expectations may be undervaluing the potential for inflationary pressures.

Implications for the European Central Bank (ECB)

The resurgence of USD-based inflation is expected to influence the European Central Bank's (ECB) policy responses. According to Steno, "The ECB is an extraordinarily reactive central bank". He recalls how during the early days of the Covid-19 pandemic, “the ECB initially refused to “close spreads” while the Fed was enacting in Gung Ho QE.”

As for the immediate future, Steno points out that, "April is off the table in market pricing, while June is mostly discounted."

Steno emphasizes the stance of influential figures like Villeroy de Galhau from France, speculating that the “best” outcome for the upcoming ECB meeting may be "some sort of pre-announcement of a cutting lean for June."

Disclaimer

The information provided by this Site is for general informational purposes only. All information on the Site is provided in good faith, however we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability or completeness of any information on the Site.

More News

23 weeks ago Analysis: New Debate Rules Favor Biden New rules announced for the June 27th debate between Joe Biden and Donald Trump serves the President well.
23 weeks ago StanChart Becomes Among the First Global Banks to Launch Spot Crypto Trading StanChart breaks new ground by launching spot trading for Bitcoin and Ether, leading the charge among global banks in the cryptocurrency space.
23 weeks ago Crypto, Currently: June 21, 2024 - Market Bears Down on Major Cryptos Daily update on the five cryptocurrencies, we consider the most interesting right now.
23 weeks ago FX Daily: June 21, 2024 – Forex Market Update Daily update from the foreign exchange markets.
23 weeks ago Amazon Plans To Make Largest Reduction of Plastic Packaging in North America To Date Amazon's response to mounting criticism over its plastic waste with a new reduction plan.
23 weeks ago Ex-OpenAI Chief Scientist Ilya Sutskever Launches New Company Amid Criticism of ChatGPT Parent's Board Appointments Ilya Sutskever, former chief scientist at OpenAI, has co-founded a new company, Safe Superintelligence Inc., amidst ongoing scrutiny of OpenAI’s recent board appointments.
23 weeks ago FX Daily: June 20, 2024 - Mixed Movements in Global Currency Markets Daily update from the foreign exchange markets.