While economists expected another modest rise in inflation on a MoM basis (if far below the 1.3% surge in June), the headline US Consumer Price Inflation was expected to slow from +9.1% YoY to +8.7% YoY in July, but it actually slowed significantly more than expected to +8.5% Yoy (flat MoM), ending a 16-month streak of MoM gains.

Core CPI (ex food and energy) however was expected to re-accelerate (rising from +5.9% YoY to +6.1% YoY in July), but instead it too continued to decelerate to 5.9% YoY.

Fuel Oil (-11%) and Gasoline (-7.7%) were among the biggest drivers.