Deflating data says take it easy

US and eurozone CPI numbers overnight suggest the globe's loose monetary settings won't let up soon, and commodity price trends reinforce this.

US and eurozone inflation data overnight confirmed what most market watchers and central bankers know and fear – we are witnessing a marked deceleration in inflation that threatens to spill over into deflation unless monetary policy settings remain at uber-easy levels for some time to come.

The US CPI fell by 0.4 per cent in April after falling 0.2 per cent in March for an annual rise of just 1.2 per cent. This is the smallest annual rise in the CPI since November 2010.

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