PCE price index to pick up going forward - Nomura

Analysts at Nomura noted the key US data from overnight and the PCE price index was essentially unchanged (+0.032%) m-o-m in March, in line with the market consensus (0.0%).

Key Quotes:

"On a 12-month basis, PCE prices rose 2.0% (2.014%) in March, from 1.7% (1.731%) previously, matching expectations (Nomura: 2.046%, Consensus: 2.0%). Excluding food and energy, the core PCE price index, the FOMC's preferred measure of the underlying inflation trend, rose by 0.2% (0.153%) m-o-m in March (Nomura: 0.191%, Consensus: 0.2%), translating into an increase of 1.9% (1.882%) on a y-o-y basis (Consensus: 1.9%, Nomura: 1.917%), up from 1.6% (1.571%) in February."

"With mixed backward revisions to the prior months, y-o-y core PCE inflation was slightly below our expectations on an unrounded basis. However, there were no major surprises in today's inflation data. As we had expected, the rise of three-tenths of a percent in core PCE inflation on a y-o-y basis was mostly due to base effects."

"We are expecting a more gradual pick-up in core PCE inflation going forward and look for core PCE inflation to reach 2.2% in Q4 2018 and 2.3% in Q4 2019."