Year over year Inflation Comparisons….

The top chart is the BBG Commodity Index (blue line), Continuous Crude Oil (green line) and the Fed’s preferred inflation measure, Core PCE yoy (white)

 

Many analyst have mentioned that yoy comparisons in oil are going to cease to depress inflation data, as the price of oil has stabilized and rallied.

The year ago levels in BCOM and Oil are circled in the charts below.  As can be seen, current levels are essentially at year ago levels….

underlining the idea that yoy comparisons will support inflation.

 

The lower two charts are shorter time frame (2-year) charts of BCOM and Oil.  As can be seen on the lower panel (oil), using a continuous contract chart,

the price has held the 50% retrace of the year’s range, and has posted a powerful rally in the past month. 

 

Jobs and wage data has supported the rate normalization argument.  

The inflation part of the mandate has been the trouble spot…but it appears as though inflation will begin to firm up.

 

BCOM CL Inflation

Posted on August 18, 2016 at 9:56 am by alexmanzara · Permalink
In: Eurodollar Options

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