US economy ready for a Soft Landing, Wall Street dominantly moved in the Green Zone. In addition to the depressed economic welfare indicators, US property market started to improve, and NHKSI Research sees the Fed will only raise the FFR by +50Bps next September, providing a Soft Landing for the US economy, in a speech scheduled for Friday at the Jackson Hole symposium. Previously, there was speculation of continued Front Loading, or an increase in FFR by +75Bps next September. Meanwhile, pressure on economic welfare was seen from the US Durable Goods Orders July which did not grow or 0.0% (Vs. Jun. +2.2%). US Pending Home Sales Jul MoM improved, only down -1.0% from market expected to fall to -2.6%, as the 30Y FR Mortgage Rate fell almost 50Bps on a monthly basis to 5.30% at the end of July.
The increase in BI 7DRRR provides certainty to the market, amid the August CPI Headline survey exceeding 5% YoY. Even though it was depressed to 7,150, JCI once again touched the psychological level of 7,200 in the second trading session yesterday. BI 7DRRR’s +25Bps increase in August provides certainty amid rising domestic inflation. Based on a Bloomberg survey, August’s YoY Headline CPI surpassed the 5% level (Vs. Jul. 4.94%), and Core YoY CPI neared the 3% level (Vs. Jul. 2.86%). However, the absence of an increase in Administered Prices and the decline in a number of food commodity prices in August, made NHKSI Research project that this period may record deflation. We project JCI to move bullish, with Support: 7,150-7,140/7,100-7,080 and Resistance: 7.204- 7,230/7,260/7,300-7,350.
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