Expecting higher inflation

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Kia ora,Welcome to Tuesday's Economy Watch where we follow the economic events and trends that affect New Zealand.I'm David Chaston and this is the International edition from Interest.co.nz.Today we lead with news inflation isn't going away in some large economies.Markets are awaiting the June US CPI data due tomorrow and a number close to 5% is expected, but first up today, <a href="https://www.newyorkfed.org/newsevents/news/research/2021/20210712" target="_blank">inflation expectations</a> in the US are still rising and fast. They jumped to +4% in May, and gave now jumped higher again to +4.8% in June as the expectation of prices in one year. And that is a series high for data that started in 2013. Expectations of house price gains in one year rose to +6.2% and also a new series high.The US Treasury tendered a 10 year bond overnight and that brought lower yield bids. <a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2021/R_20210712_4.pdf" target="_blank">The US$44 bln tender</a> brought $97 bln in bids (of which US$6 was taken by the Fed) and the median yield was 1.31%, down from the 1.44% at <a href="https://www.treasurydirect.gov/instit/annceresult/press/preanre/2021/R_20210609_2.pdf" target="_blank">the equivalent tender</a> a month ago.In China, there is increasing concern even in official channels of a slowing economy.In India, their <a href="http://mospi.nic.in/sites/default/files/press_release/CPI_Press_Release_12july21.pdf" target="_blank">June inflation rate</a> was released overnight, coming in at +6.3% and well above <a href="https://rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=51380#:~:text=On%20March%2031%2C%202021%2C%20the,April%202021%2DMarch%202026)." target="_blank">the RBI target</a> (of 4%). Food prices (+5.2%) helped keep it high but it was fuel (+12%) that was the monthly driver.Japanese machine tool orders made a very

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