Tuesday News 25 / 11 / 68

Month-on-month PPI (MoM) fell -0.1%, which was + 0.3% lower than expected and down from + 0.7% of the previous month.

The annual PPI rate is + 2.6%, which is also below the forecast of about + 3.3%.

There is still no data for the complete September split monthly MoM (some sources indicate it is pending an announcement).

🔍 Meaning & Impact

The decline or "softer" of PPIs is expected → reflects that inflationary pressure is not yet hot in the manufacturing sector.

It is a positive sign for "goods / services" prices that may not be fully passed as consumer prices (CPI).

This results in the market seeing the Federal Reserve (Fed) as having a "niche" to more easily enact relaxation measures (such as reducing interest) because inflation is also controlled, especially upstream of the product.

📊 Impact on the market

The U.S. dollar (USD) may weaken slightly, because inflation is not strong → decreases dollar buying force as an anti-inflation asset.

The price of "gold" (Gold) may be driven, because when inflation is not very strong → interest may be reduced → reduce the cost of holding gold (which does not provide interest).

Stock markets / risky assets may pick up the good news, because inflation risk decreases → the Fed's chances of easing, promoting liquidity.