Baxia Markets
July 14, 2021

US PPI Comes In Hot

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What is the Producer Price Index? 


The Producer Price Index excluding Food & energy released by the Bureau of Labor Statistics, Department of Labor measures the average changes in prices in primary markets of the US by producers of commodities in all states of processing. Those volatile products such as food and energy are excluded in order to capture an accurate calculation. 


It's a leading indicator of consumer inflation - when producers charge more for goods and services, the higher costs are usually passed on to the consumer; it represents the change in the price of finished goods and services sold by producers; It’s released monthly, about 13 days after the month ends.



What are the expectations for US PPI?


The Producer Price Index YoY is expected to be at 5.1%, previous was 4.8%

Professional Insight


The Producer Price Index for final demand increased 0.8 percent in May. Final demand prices rose 0.6 percent in April and 1.0 percent in March. On an unadjusted basis, the final demand index advanced 6.6 percent for the 12 months ended in May, the largest increase since 12-month data were first calculated in November 2010.

What happens if…


If 'Actual' is greater than 'Forecast' is good for the currency. A high reading is seen as positive (or bullish) for the USD. 


What happens if…


Generally speaking, a low reading is seen as negative (or bearish) for the USD

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