Tonight at 20:30 US June PPI data is coming! Upstream inflation signals are key—combine with CPI to gauge market direction
Yesterday’s CPI headline fell notably (expected 3.8%), but the core remained sticky. Tonight, PPI (Producer Price Index)—an upstream indicator—will further validate the inflation path.
Market consensus expectations:
- Headline PPI: m/m 0.0% to +0.2% (prior +1.1%), y/y around 6.3% (prior 6.5%)
- Core PPI (excluding food and energy): m/m +0.4%
- Ex food/energy/trade services: m/m cooling to +0.4% (prior +0.8%)
My brief personal outlook:
- Base case: data matches or comes in slightly softer than expected (energy drag is clear) → strengthens the “inflation is peaking and rolling over” narrative. The probability of a September rate hike (currently 50%+) may dip slightly, US Treasury yields may pull back, and tech/growth stocks could receive support.
- Risk case: if core or core goods run hotter than expected → confirms that cost pressure is still in the pipeline. Rate-hike pricing would heat up further, and market volatility could increase.
- PPI often leads CPI signals. If upstream pressure persists, it will affect corporate profits and subsequent consumer inflation.
- Add to that Middle East geopolitical factors (oil price volatility). Tonight’s data is crucial to the final inflation piece before the Fed’s July meeting.
In summary: if PPI cools as expected, it would be a positive continuation of CPI. If stickiness surprises to the upside, it would reinforce a hawkish path. In the short term, the odds of a “soft landing” look relatively higher, but geopolitics and core stickiness remain key variables.
Do you think tonight’s PPI will be a “positive confirmation,” or will it keep pushing up rate-hike expectations? We’ll know tonight!
👀
Yesterday’s CPI headline fell notably (expected 3.8%), but the core remained sticky. Tonight, PPI (Producer Price Index)—an upstream indicator—will further validate the inflation path.
Market consensus expectations:
- Headline PPI: m/m 0.0% to +0.2% (prior +1.1%), y/y around 6.3% (prior 6.5%)
- Core PPI (excluding food and energy): m/m +0.4%
- Ex food/energy/trade services: m/m cooling to +0.4% (prior +0.8%)
My brief personal outlook:
- Base case: data matches or comes in slightly softer than expected (energy drag is clear) → strengthens the “inflation is peaking and rolling over” narrative. The probability of a September rate hike (currently 50%+) may dip slightly, US Treasury yields may pull back, and tech/growth stocks could receive support.
- Risk case: if core or core goods run hotter than expected → confirms that cost pressure is still in the pipeline. Rate-hike pricing would heat up further, and market volatility could increase.
- PPI often leads CPI signals. If upstream pressure persists, it will affect corporate profits and subsequent consumer inflation.
- Add to that Middle East geopolitical factors (oil price volatility). Tonight’s data is crucial to the final inflation piece before the Fed’s July meeting.
In summary: if PPI cools as expected, it would be a positive continuation of CPI. If stickiness surprises to the upside, it would reinforce a hawkish path. In the short term, the odds of a “soft landing” look relatively higher, but geopolitics and core stickiness remain key variables.
Do you think tonight’s PPI will be a “positive confirmation,” or will it keep pushing up rate-hike expectations? We’ll know tonight!
👀