The October rice producer price index (PPI) will be announced today. The sudden sell-off of the US dollar following the slowdown in the US consumer price index (CPI) last week is still fresh in our minds. Yesterday, Waller warned the market against overreaction, saying, “The CPI is just one piece of data, and we need to see strong evidence that the inflation rate is declining.” However, the impact of the CPI slowdown continues, and expectations for a 50bp rate hike at the December FOMC meeting have risen from about 50% before the announcement to about 80% at present. It’s almost a consensus.
Regarding today’s PPI, the market is expected to slow down from +8.5% in the previous year to +8.3% year-on-year. The core year-on-year growth is expected to be +7.2%, the same level as last time. It is an index after CPI, which has a higher degree of attention, so it is undeniable that it is a second guess. However, if the divergence from market expectations becomes large, the dollar market will react obediently. I would also like to check changes in expectations regarding the December FOMC meeting. At the same time, the November New York Fed manufacturing index will also be released. The market forecast is around -6.0, which is expected to improve from the previous -9.1. The announcement is scheduled for 10:30 p.m. Japan time.
The US Producer Price Index (PPI) may gain momentum in the US dollar, so be careful. A place where you want to go with the flow.
