· The August CPI and PPI data suggest that the Fed's preferred inflation gauge, the core PCE deflator, will likely remain steady at 0.16% when it is released on Sep 27. This could prompt officials to start cutting rates this month. However, without a clear signal from the Fed for a significant rate cut, a 25-bp move in September is more likely.
· The core PCE deflator for Aug is estimated to be 0.16%, consistent with the monthly pace required for inflation to return to the Fed's 2% target. The core PCE likely rose to 2.7% in Aug on a yoy basis. Fed Chair Jerome Powell’s favored “supercore” inflation measure likely rose 0.2% in Aug. T
· The biggest drag on August core PCE will likely come from other durable and nondurable goods, recreation goods and services, and financial services. However, this is offset by a slowing disinflation or even reacceleration in autos, clothing and footwear, lodging, and other services.
· Looking forward, October's core PCE is expected to rise more quickly than the roughly 0.17% average of the past two months due to adjustments in medicare reimbursement rates, which should push up health-care costs.
· As a result, we expect CSOPUMM to continue to deliver stable yield in the near term. As of 20240913, the fund has gross yield of 5.38% and net yield at 5.06%.^
Source: CSOP, BLS, BEA Bloomberg, as of 20240913. ^ Gross yield is based on annualized yield of underlying holdings. 7-day net yield is calculated based on calendar days and NAVs in 5-decimal.
Disclaimers
“The investment product(s), as mentioned in this document, is/are registered under section 286 of the Securities and Futures Act (Cap. 289) of Singapore (the “SFA”).This material and the information contained in this material shall not be regarded as an offer or solicitation of business in any jurisdiction to any person to whom it is unlawful to offer or solicit business in such jurisdictions. This document is not to be construed as recommendations to buy/sell any above-mentioned securities, or any securities in the above-mentioned sectors or jurisdictions.
CSOP Asset Management Pte. Ltd. (“CSOP”) which prepared this document believes that information in this document is based upon sources that are believed to be accurate, complete, and reliable. However, CSOP does not warrant the accuracy and completeness of the information, and shall not be liable to the recipient or controlling shareholders of the recipient resulting from its use. CSOP is under no obligation to keep the information up-to-date. The provision of this document shall not be deemed as constituting any offer, acceptance, or promise of any further contract or amendment to any contract. The information herein shall not be disclosed, used or disseminated, in whole or part, and shall not be reproduced, copied or made available to others without the written consent of CSOP.
Advice should be sought from a financial adviser regarding the suitability of the investment and/or investment product before making an investment. Investment involves risk. The value of investments, and the income from them, can go down as well as up and an investor may get back less than the amount invested. Past performance is not necessarily indicative of future performance. Investor should read the prospectus and product highlights sheet, which can be obtained on CSOP website or authorized participating dealers, before deciding whether to invest. This document has not been reviewed by the Monetary Authority of Singapore.”
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