CITIC Securities says June US CPI came broadly below expectations: retail
gasoline fell, core services were flat MoM, and second‑round inflation effects
were weak. The firm assesses inflation lacks persistence; headline CPI YoY has
passed this cycle’s peak, should drift down modestly in Q3 with a trough in
September, rise to a secondary peak by year‑end and then fall sharply by March
next year. CITIC still expects the Fed to keep policy rates unchanged through
the year and sees room for derivatives‑implied hike probabilities to be revised
lower. Market implications: US Treasures are not attractive for allocation
trades—short‑duration better than long‑duration; the dollar is unlikely to
sustain a strong rally but retains support; US tech equities remain attractive.
