CPI Lower Than Expected

June CPI came in lower than expected. Headline CPI was -0.1% MoM versus +0.1% expected and 3.0% YoY versus 3.1% expected. Core was +0.1% MoM versus 0.2% expected and 3.3% YoY versus 3.4% expected.

Futures initially added to their overnight gains but are approaching flat again, perhaps in recognition that SPX had already reached important Fibonacci resistance yesterday.

The July CPI print should be the first month to fall below 3% as long as oil/gas prices remain steady or lower for the next few weeks.

The bond market responded quickly, with the 10Y tagging our next downside target.

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