Import and Export prices were expected to further slow the deflationary impulse caused by global pandemic lockdowns in June and on a MoM basis both Imports (+1.4% vs +1.0% exp) and Exports (+1.4% vs +0.8% exp) beat expectations. This is the biggest jump in Import prices MoM since March 2012...
However, the deflationary impulse remains strong YoY (even after May downward revisions)...
Ex-Petroleum, import prices rose 0.3% MoM (better than the +0.1% expected).
The big question is, will China's massive credit impulse to "save" its economy lead to a huge spike in trade flow inflation?
Dallas Fed's Kaplan was undecided yesterday claiming that massive US over-capacity will control inflation (but also said he expects food prices to rise on supply shortfalls).