2024-07-13 16:54:37
The Producer Price Index (PPI) will be released on the 12th, amid slowing inflation, with the U.S. Consumer Price Index (CPI) falling for the first time since the coronavirus pandemic last month compared to the previous month.
On this day, the U.S. Department of Labor will announce the PPI at 8:30 a.m. (9:30 p.m. on the 12th, Korean time), before the opening.
Although PPI is not as important as CPI, it is recognized as a leading indicator of CPI. This is because when PPI falls, CPI usually falls a few months later.
The June PPI is expected to rise from the previous month. The market expects the June PPI to rise 0.1% from the previous month, exceeding the 0.2% drop in the previous month.
If the PPI falls short of market expectations, expectations of a rate cut are likely to increase further.
The CPI announced on the 11th showed a significant slowdown.
On this day, the U.S. Department of Labor announced that the CPI last month fell 0.1% from the previous month and rose 3.0% from the previous year. The market expected a 0.1% increase from the previous month and a 3.1% increase from the previous year.
This is the first time in four years since May 2020 that the CPI has fallen compared to the previous month. The 3.1% drop year-on-year is also the lowest level in three years.
Core CPI, which excludes volatile food and energy prices, also rose 3.3% year-on-year, lower than market expectations (3.4%). This is also the lowest level since April 2021.
Energy prices fell 2.0%, dragging down the overall price index, indicating a significant slowdown in inflation.
Accordingly, interest rate futures traded on the Chicago Mercantile Exchange (CME) once reflected a 93% chance that the Fed would cut rates by 0.25 percentage points at its September meeting, compared to 75% the day before.
In this situation, if the PPI falls below market expectations, a September interest rate cut is likely to become a foregone conclusion.
(Seoul = News 1)
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2024-07-13 16:54:37