U.S. Economy: Inflation will fall more than expected, opening room for interest rate cuts (Nomura)
Nomura Securities released the U.S.
Nomura Securities released the U.S. Economic Weekly Report, and its core prediction is that the upcoming June CPI data will be significantly lower than the market consensus. Nomura predicts that the overall CPI will be -0.203% month-on-month (market expectation is -0.1%), and the core CPI will be 0.215% month-on-month (market expectation is 0.3%). If the data is in line with Nomura's forecast, it will mark a decisive step in the US de-inflation process, significantly alleviate the market's inflation anxiety, and become a key turning point in pushing the Federal Reserve to turn dovish and pave the way for interest rate cuts. The market's current concerns about sticky inflation may be exaggerated. One-sentence conclusion: The unexpected decline in inflation will be the biggest macro trading theme in the coming week. If the data is in line with Nomura's forecast, it will completely change interest rate expectations and risk asset preferences. Good/bad: Good for U.S. bonds, growth stocks, and emerging markets. Bearish for the dollar. The market has not fully expected the low CPI value in June, and if it is realized, it will trigger a huge market. Catalysts: 1) The U.S. June CPI data released on July 14 is the most important verification point this week.