Written Commentary
ADM Exceeds 5M Regenerative Agriculture Acreage Gal
September 9, 2025
US CPI dominates otherwise modest run of data and events; Australia Trade, BoK policy guidance to digest; Brazil inflation, US weekly jobless claims, and Treasury budget; Fed and ECB speakers; US 30-yr auction
US CPI: gasoline prices to push headline up modestly; housing and medical insurance, and ebbing goods price disinflation to keep core somewhat ‘sticky’
China: CPI and PPI to remain stuck in deflation, trade to confirm soft external demand
EVENTS PREVIEW
Today’s schedule of data and events has a busy look to it, but outside of the key US CPI data, the remainder of the schedule looks unlikely to fire up rather listless markets, with Australian Trade and the as expected no change rate decision from the Bank of Korea to digest, while ahead lies a smattering of central bank speakers, Brazilian inflation, US weekly jobless claims, Treasury Budget and 30-yr T-bond auction. Tonight brings China’s inflation and Trade data ahead of the early morning release of UK GDP and monthly activity indicators.
** U.S.A. – December CPI **
After dragging headline CPI lower in recent months, gasoline prices are set to boost December CPI to 0.2% m/m, edging the y/y rate up to 3.1%, while core is seen remaining a little bit sticky at 0.3% m/m, but easing in y/y terms to 3.8% from 4.0%. Shelter will continue to be a key upward pressure point on core inflation, even though it should continue to gradually dissipate, Medical insurance will also exercise some upward pressure, but the downward pressure from core goods prices is likely to ebb. As with last week’s labour data, this week’s inflation data are unlikely to support the idea that rates are “overly restrictive”.
** China – December CPI, PPI and Trade Balance **
Deflation is expected to remain entrenched, with CPI forecast at -0.4% y/y and PPI at -2.6% y/y (vs. Nov -0.5% and -3.0%), with food prices seen giving a marginal boost to CPI, and some raw materials price rises countering broader finished goods deflation for PPI. Trade data will likely underline that external demand remains sluggish, with Exports seen ticking up to 1.6% y/y on benign base effects, while Imports are seen flat y/y, though anecdotal evidence on seasonal trends suggests some downside risks for both. Neither are likely to assuage considerable concerns about its economic outlook, above all due to contagion from the property sector’s woes, and while further easing of Reserve Requirement Ratios looks likely in the near future, and perhaps another small rate cut, the onus is very much on fiscal and other legislative measures to accelerate balance sheet resolution in the woe stricken property sector.
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