Headline inflation slopes, as fuel costs fall 20%. Both Headline CPI and US Core CPI July YoY sloped to 8.5% (Vs. Jun. 9.1%) and 5.9% (Vs. Jun. 5.9%), potentially easing the Fed’s Hawkish stance. FFR Futures show the probability of a September 75Bps increase dropping from 63% to 43%, based on Refinitiv data. In addition to the Growth Stock, the technology sector will also benefit from a more relaxed FFR, pushing the Nasdaq up nearly 3%. Meanwhile, food as an important component of the CPI calculation remains high, leaving the July CPI Headline unchanged compared to the previous month, after a 1.3% MoM increase in June.

Cigarette excise duty in 2023 to rise, as FY22 GDP is maintained at 5%. Economic growth is one of the factors that the Ministry of Finance uses to determine the Cigarette Excise rate. Dovish stance of BI supported the momentum of impressive GDP growth in 1Q22 and 2Q22, with FY22 projected to be maintained above 5%, and will be in line with the increase in Cigarette Excise. For the record, FY21 GDP grew 3.69% YoY, making the 2022 Cigarette Excise increase 12%. Using this assumption, the FY22 GDP projection is maintained at 5%, which will make the 2023 Cigarette Excise increase higher than 12%. Furthermore, the 2023 APBN excise target will be submitted by the president in a financial note on August 16, 2022. NHKSI Research projects that JCI will move Consolidating/Pullback with Support: 7.020-7.000 / 6.930-6.915 and Resistance: 7.105- 7.145 / 7.175.

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