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Inflation time

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  • Today has an Anglo-Saxon bias to it. The main release of the day is the US consumer price data. We are looking for a slightly higher than consensus headline figure of 0.1%. Gasoline prices will constrain the number, but service prices should add to it. Auto prices add uncertainty to the core figure.
  • Australia (which can only be bothered to publish price inflation data once a quarter) offered CPI exactly in line with UBS expectations. We look for a benign central bank policy tightening cycle from mid-2015.
  • Bank of England minutes are due (along with one BoE speaker and the BoE Agents' Survey). The number of dissents to the unchanged policy is likely to generate headlines, but any assessment of the efficacy of mortgage standard tightening may also be of interest.
  • The value of Japanese exports and Japanese imports rose, reflecting yen weakness (currency weakness raises export values in domestic currency terms but may not change volumes). Exports to Asia were strong, though that may reflect outsourcing rather than indigenous Asian demand.

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