June CPI came in slightly lower than expected: +0.2% MoM versus +0.3% expected and 2.97% YoY, the lowest since March 2021. Core CPI fell to 4.8%.
Futures had already popped overnight, but the soft CPI further boosted the gains with the .785 Fib level top of mind.
As we discussed last month, the benefit from YoY price declines in oil/gas has maxed out unless prices continue to fall. The chart below shows the effects if gas prices were to stabilize at current levels.In other words, central bankers might need to drive oil/gas prices even lower.
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