The Economic Cycle Research Institute, ECRI - a New York-based independent forecasting group, in a series of six press releases last night and this morining, updated their outlook for global inflation. (More about ECRI). Below is a summary of ECRI's international Future Inflation Gauges (FIG) for February 5, 2010.
United States: FUTURE INFLATION GAUGE KEEPS CLIMBING
- ECRI’s U.S. Future Inflation Gauge (USFIG) continued to increase in January. The value of the USFIG lies in its ability to measure underlying inflationary pressures and thereby predict turning points in the U.S. inflation cycle.
- The USFIG rose to 102.0 (1992=100) in January from 99.0 in December, as did its smoothed annualized growth rate to 37.6% from 33.8%. The gauge was pushed up in January by inflationary moves in most of its components.
- With the USFIG now advancing for ten straight months, underlying inflation pressures are
in a sustained cyclical upswing, promising higher inflation in the coming months.
EUROZONE FUTURE INFLATION GAUGE SLIPS
- Inflation in the Eurozone has begun to perk up, as anticipated by the upturn in the EZFIG. Clearly, with the EZFIG remaining close to November’s 11-month high, underlying inflationary pressures in the Eurozone have begun to resurface.
- German inflationary pressures dipped in December.
- German inflation remains in a cyclical upswing and well above its cycle low, in line with the upturn in the GFIG. With the GFIG staying near November’s nine-month high, German inflationary pressures are still in a cyclical uptrend.
- French inflation pressures rose in December.
- The FFIG has risen from the all-time low seen in June 2009 to its highest reading in over a year. Thus, French inflation is likely to rise further in the coming months.
Italy: ITALIAN INFLATION PRESSURES DIP
- Italian inflation pressures eased in December.
- Italian inflation rose further from its mid-2009 low, as anticipated by the upturn in the IFIG. Meanwhile, despite its latest down tick, the IFIG remains near earlier highs. Thus, Italian inflation is likely to remain in an uptrend.
Spain: SPANISH INFLATIONARY PRESSURES INCREASE A BIT
- Spanish inflationary pressures edged up in December.
- Despite its recent dip, the ESFIG remains in a cyclical upturn and well above its cycle low. Thus, Spanish inflation is likely to increase in the months ahead.
Japan: JAPANESE FUTURE INFLATION GAUGE RISES AGAIN
- ECRI’s Japanese Future Inflation Gauge (JFIG) advanced further in December.
- Japanese consumer prices have begun to stabilize following their deflationary decline.
- This was anticipated by the earlier upturn in the JFIG, which has now risen for five consecutive months to a 13-month high. Thus, the threat of persistent Japanese deflation continues to recede.
Korea: SLIGHT RISE IN KOREAN INFLATIONARY PRESSURES
- Korean inflationary pressures increased marginally in December.
- With the KFIG rising to a 14-month high in its latest reading, Korean inflation will increase in the months ahead.
Canada: DOWNTICK IN CANADIAN INFLATION PRESSURES
- ECRI’s Canadian Future Inflation Gauge (CFIG) edged down in December.
- Despite its latest dip, the CFIG remains well above March’s 26-year low, and close to October’s 15-month high. Thus, Canadian inflation pressures remain in a cyclical uptrend.
United Kingdom: U.K. FUTURE INFLATION GAUGE UNCHANGED
- U.K. inflation pressures were unchanged in December, according to ECRI’s United Kingdom Future Inflation Gauge (UKFIG).
- Despite its recent downtick, the UKFIG remains well above June’s all-time low and close to October’s one-year high. Thus, U.K. inflation pressures continue to be in a mild uptrend.
More information:
- I Bond Rates
- US Treasury: Rate Quotes
- Expected Inflation - TIPS Spread
- Kirk's Two Investment Letters
- More about ECRI
- July 31, 2009: ECRI Predicts End of Home Price Downturn
- July 21, 2009: ECRI Predicts The End of the Recession is Imminent
- April 3, 2009: Upturn in ECRI's WLI Growth Rate Says US Business Cycle Recovery Ahead
- How to become an "ECRI Pro" Client
Kirk, thanks for the summary of ECRI's FIG.
ReplyDeleteFailed 30-Year Auction Closes Rough Week; Treasurys Fall
ReplyDeleteCNBC staff and wire reports | February 11, 2010 | 01:12 PM EST
A n anemic government auction of 30-year bonds closed out a weak round of debt sales with low demand on the far end of the debt yield curve.
The $25 billion auction fetched a whopping 4.72 percent high yield on weak demand, reflected in a 2.36 bid-to-cover ratio that compares demand for each dollar auctioned. The average is about 2.50.
Direct bidding, or Treasurys bought directly through the government, was 24 percent, considered a high number and indicative of weak foreign demand when compared to the indirect bid done through dealers of 29 percent.
Treasurys immediately sold off on the news after being modestly lower earlier in the session.
The benchmark 10-year note yield jumped to 3.75 percent while the 30-year long bond yield moved to 4.69 percent, well above the 4.62 percent from late Wednesday.
Investors earlier paid little attention to lower than expected weekly jobless claims.
The number of U.S. workers filing new applications for jobless benefits fell to a seasonally adjusted 440,000 for the week ended Feb. 6, below analysts' expectations for a reading of 465,000 and down from the previous week's 483,000. The market largely shrugged the data off however.