WPI inflation peaked appears to have peaked in May - June 2022 from highs of 16.68% to most recently released figure of 4.95%. This is the lowest print since March 2021. The decline was broad based but the primary articles saw a mom decline of 2.98% followed by fuel and power at -1% and the manufactured products basket falling 0.28% mom. On a yoy basis, fuel and power which has a weight of 13.2% in the WPI basket is up 18% yoy.
The recent decline in WPI confirms the goods disinflation narrative while the stickiness of the core persists (earlier CPI)
While OIS continues to respect the range established earlier:
1Y OIS Range 6.55% - 6.75%, level 6.69%
5Y OIS Range 6.15/20% - 6.50%, level 6.25%
1x5 OIS spread has widened to - 44 bps from early dec lows of 43 bps.
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