US INFLATION

Consumer price inflation in the United States has moderated slightly, according to a report released this week, rising by 8.5% year-on-year in July, down from its 9.1% high in June. The decline has raised hopes that inflation has peaked in the US. In its daily market report, RMB noted: “The below-consensus print led to a rally in risk assets, with the logic that softening inflation has reduced the probability of aggressive US Federal Reserve rate hikes. Notably, core inflation held flat on the month at 5.9%. However, although the latest number is better than the June figure, consumer price growth is still at a 40-year high. It may contribute to a continued hawkish tone from the Fed, especially given the strong jobs report last week, which suggests wage growth could catch up with inflation.”