TD Securities economists have highlighted that recent increases in US Treasury yields were influenced by headlines regarding Middle East tensions and upcoming supply, but market attention is now shifting to the April United States Consumer Price Index (CPI) release [1]. According to TD Securities, they forecast the core CPI to print at 0.38% month-over-month (m/m), which is slightly above the consensus estimate of 0.36% m/m [1]. The headline CPI is expected to remain firm at 0.56% m/m, with oil prices continuing to impact inflation [1].
The economists attribute the anticipated acceleration in core CPI inflation to a rebound in shelter prices resulting from methodological adjustments, as well as oil price increases likely passing through into airfares [1]. While core goods inflation is expected to remain subdued, modest tariff passthrough is noted [1]. For headline CPI, TD Securities expects a firmer print at 0.56% m/m, supported by strong gasoline prices and a rebound in food prices following a flat March [1].
These forecasts suggest that the upcoming CPI data could influence Dollar and rates pricing in the coming days, as market participants react to the inflation figures and their implications for monetary policy [1].
CONCLUSION
TD Securities projects both core and headline US CPI for April to exceed consensus estimates, primarily due to shelter and energy price increases. The anticipated inflation data is expected to impact Dollar and rates pricing, with market participants closely watching for implications on monetary policy. Overall, the outlook is moderately positive for inflation, with potential market reactions centered on the CPI release.