US July PPI 4.7% y/y vs 4.9% expected
From the original
Prior was 5.5% PPI m/m 0.0% vs +0.2% exp PPI ex-food and energy +0.2% m/m vs +0.3% exp PPI ex-food and energy +4.2% y/y vs 4.2% exp Prior ex-food and energy +4.7% This is more evidence for a softer PCE inflation report later in the month and is a negative for the US dollar, which
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The market reacted to a softer-than-expected US CPI print by pushing the DXY dollar index down by 0.5%, signaling a recalibration of Fed tightening expectations. Per the full note from ING, this release has prompted a 10bp reduction in projected Fed rate increases, reflective of market sentiment that a pause in rate hikes is more plausible. Additionally, various high-yield commodity currencies are poised to benefit from this inflation backdrop. This sentiment comes ahead of today's PPI data and further Federal Reserve commentary, which may reinforce or mitigate the dollar’s current trajectory.