Fynsa
At this point, I would say that with each release of the CPI, one has a secret hope that the data, once and for all, will be low.. That it indicates that inflationary pressures are starting to lose strength, that it is mainly the volatiles that explain the variation and that, after quite some time, the evolution of prices is starting to normalize.
Unfortunately, that didn't happen today. Again.
The INE published the June CPI, which increased 0.9% m/m (0.931% m/m), which was below our and the market's expectations (1.1% and 1.2% m/m, respectively). Thus, the year-on-year variation reached 10.5%, accumulating 7.1% so far in 2022..
By division, it was Transportation had the highest positive impact (+2.6% m/m; 0.374 pp incidence). (+2.6% m/m; incidence 0.374 pp) and Non-Food (1.2% m/m; incidence 0.250 pp), which in any case ranked second. This data is relevant because, at least in our countryThis data is relevant because, at least in our estimation, it was precisely this surprise that made the variation this surprise that caused the variation to be slightly lower than estimated.. Likewise, we are talking about a volatile component (fruits and vegetables) that does not change the inflationary trend of recent months.
In underlying terms, the CPI without volatility reached 9.9% YoY (0.7% m/m), up from 9.0% in May, influenced almost equally by the goods component (13.3% YoY) and the services component (7.5% YoY).. In any case, the largest variations continue to be in the volatile components: Food (19.5% y/y) and Energy (21% y/y).These movements should continue in the coming months, due to the increases in fuel prices and the recent exchange rate hike. In fact, although the diffusion index was the lowest of the year (54%), it is still the highest for any June since the current CPI methodology has been followed.. Therefore, this slight surprise should not dampen inflationary sentiment in the coming months, which should reach their year-on-year peak in August..
Thus, variations around 1.0% m/m should continue in the immediate term, with a preliminary estimate of 1.0% m/m for July. This would bring the year-on-year variation to 12.7%.. Unfortunately, for those who expect inflation to ease a bit in the coming months, our answer is: not yet, our answer is: not yet..
Under this scenario, the Central Bank would not change its intention to raise the TPM by 50 bp at the next meeting, taking it to 9.5%.to 9.5%. We do not rule out that after this move, it will move to a neutral bias, with an indication, however, that marginal movements could be seen in the following meetings. But we believe that the bullish rate cycle would be very soon to end..
