May CPI data will be released on Thursday (08:30 ET). A 0.5% m/m gain is expected (in line with consensus) for a 0.0% y/y reading, mainly boosted by increased gas prices.



Lower airfares may be a further damper. By contrast, rents are likely to have remained firm. Rents have a lower weight in the PCE index (the Fed's preferred inflation measure), partly explaining the large CPIPCE gap.



The Philly Fed business index (10:00 ET), also released on Thursday, may be scrutinised given the large Empire (New York) index's 'miss' earlier this week.



Standard Chartered notes:



We see the core reading up 0.1% m/m, a touch below the consensus view of 0.2%. This would translate into a 1.7% y/y gain, from 1.8% prior.





We think April's 0.3% print was partly boosted by temporary factors, including a sizeable increase in health-care costs, which may retrace.