Core PPI rose 0.2% month-on-month, in line with analyst expectations. On an annual basis, core PPI grew by 2.8%, beating analyst estimates of +2.7%.
Producer price data may surprise markets as yesterday’s CPI report showed core inflation rising.
Treasury yields fell as bond traders reacted to the report. The interest rate on government bonds with a term of 2 years fell to the level of 3.96%, while the interest rate on government bonds with a term of 10 years fell to 4.09%.
The US Dollar Index attempted to break below the 102.80 level following the release of the Producer Price report. Producer prices rose less than expected on a monthly basis, which is bearish for the US currency.
Gold moved towards $2650 as traders focused on the US dollar’s pullback.
SP500 climbed above the 5790 level as traders bet inflation could slow. NASDAQ rose above the 20,200 level, while Dow Jones tested the 42,500 level.