Today's U.S. reports
Today's U.S. reports revealed weak import prices through June but a small upside export price surprise that left a mixed report overall, alongside a July drop in Michigan sentiment to a 6-month low of 97.1 as analysts further unwound the climb through March to a 14-year high of 101.4, though all the confidence measures remain at high levels. Analysts still expect a July consumer confidence rise to 127.0 from 126.4, as other confidence measures rose in July. The inflation expectations measures in the Michigan survey slipped in July, to 2.9% for the 1-year measure and 2.4% for the 5-10 year measure, but have an upward tilt into 2018 via a climb through June. For the trade price measures, import prices fell 0.4%, but exports prices rose 0.3%, with import price restraint from a 0.8% petroleum price drop alongside a 0.3% decline ex-oil, alongside an export price lift from a 0.4% increase in non-agricultural export prices despite a 1.0% food price drop. Tariffs will depress the trade price measures going forward despite upward domestic price pressure, as the indexes gauge pre-tax price levels and producers will absorb some of the tax impact.