US PPI showed huge November gains of 0.8% for the headline and 0.7% for the core that rounded from respective increases of 0.835% and 0.685%. The y/y PPI gain climbed to 9.6% from 8.8% (was 8.6%) in September and October to leave an eighth consecutive all-time high, while the core y/y gain rose to 7.7% from 7.0% (was 6.8%) in September and October to leave a ninth consecutive all-time high. On a moving average basis, PPI headline and core gains are actually slipping from bigger gains earlier in the year. We have 6-month average price gains of 0.748% for the headline and 0.618% for the core that slightly undershoot respective 12-month average gains of 0.778% and 0.625%. In December, the consensus for PPI gains are 0.3% for the headline and 0.6% for the core. The y/y headline metric would then tick up to 9.7% from today’s 9.6% new all-time high. Also the expectations are for the y/y core price gain to climb to an 8.2% new all-time high from today’s 7.7% all-time high. The y/y gains should finally moderate starting in January due to much easier comparisons.
The Greenback was little changed, but a bit higher on net following the much hotter PPI outcome. USDJPY dipped to 113.44 from 113.55 before recovering to 113.60 while EURUSD edged up to 1.1318 from 1.1310 but has reversed back below 1.1300 at the opening bell. The main US equity markets have all opened in the red, with the USA100 once again the weakest, down by over -1.0%, and the USA500 shedding -0.3%.
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Head Market Analyst
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