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Analysts at TD Securities note that the US February CPI slid to 1.5%, below consensus thanks to a broadly weak showing across core goods and services.

Key Quotes

“Core CPI decelerated to 2.1%, with widespread disappointment concentrated in goods. On an encouraging note, however, OER showed a strong pickup.”

“This report helps to embolden our view that shelter CPI will maintain its upward pull on inflation this year. But the lack of breadth especially across core services prices makes us more cautious going forward.”

“FX: Softer core reading emphasizes the cautious tone of central banks currently, and by extension suppressed vol and carry strategies. We note however that the USD remains the carry king within the G10, so the knee-jerk pop in the dollar bloc are unlikely to be sustained.”