CSOP USD Money Market Fund Wrap-20240819

Last week, July’s PPI report came out milder-than-anticipated as the headline final demand measure increased by 0.1% monthly, below the expected 0.2%, and the core index remained steady, dropping to 2.4% year-on-year from June's 3.0%.

Additionally, we also saw mild CPI reading, with the headline CPI and core index rising 0.2% and 0.165% respectively, meeting expectations, thereby contributing towards Fed’s 2% target.

We saw better-than-anticipated domestic data where initial claims dropped to 227k, not significantly higher than previous summers when considering factors like Hurricane Beryl and seasonal auto plant closures. Retail sales also surpassed predictions, with a 1.0% increase in July and the control group rising by 0.3%. This data suggests a stronger start to 3Q real consumer spending than expected.

With soft PPI and CPI data increasing Fed officials’ confidence level that inflation is falling, the Federal Reserve can maintain its focus on the labor market in future policy decisions.

Source: CSOP, Department of Labor, Bloomberg, as of 20240816. ^ Gross yield is based on annualized yield of underlying holdings. 8-day net yield is calculated based on calendar days and NAVs in 5-decimal.

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