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Analysts at TD Securities are looking for the US headline CPI to pick up two tenths to 2.1% in April on the back of a strong 0.4% seasonally-adjusted monthly increase.

Key Quotes

“The main driver behind the monthly gain is another sizable jump in gasoline prices. Furthermore, we anticipate core CPI inflation to register another “soft” 0.2% m/m gain (2.1% y/y), as a firm 0.2% increase in core services prices will likely offset a third consecutive monthly decline in prices in the core goods segment (which we pencil in at -0.1% m/m).”

“Largely subdued April PPI inflation suggests no mounting risks of pass-through to CPI, as weak trade services inflation indicate limited pricing power by firms.”