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PPI/CPIWhile the Federal Reserve aims for - Full Employment... The Math in the preceding prior 2 commentaries, turns that Sillyness on its head. While Producers are simply just Beginning to pass to on Higher Costs (Reported by EVERY COMPANY during Q3 EPS)... With the Highest Rate of Change in HIstory for this Ratio... It's all good. ____________________________________________________ A very rapid drop in productivity despite jobless claims falling back to pre-pandemic levels... Again, refuted, dumped on its collective Fed Head. Total Hours worked continue imploding, not recovering. ____________________________________________________ Real Wages... can't come close to keeping up with Actual Inflation. Your Dollars Buy Less, Your Government Sponsored Enterprise aka The Bond Market is being destroyed Brick by perfidious Brick. It's Ok, no worries as long as the Hoi Polloi don't mind and the First Abusers continue to make 12.08% gains every month... all will be well. Just move along and Buy Stocks. ____________________________________________________ It is abundantly clear the Economy -what is left of it, aka the Equity Markets are guiding Monetary Policy. Fiscal Policy is a wet donut drowning in cold Java. The Kleptocrsts in DC are tossing salads and doing effectively - nothing. This is precisely what the Fed and is Handlers want, desire, and continue to assure. ____________________________________________________ There remains an inherent Risk of a continuation pattern IF this does not correct soon. The Equity Complex achieved a feat so completely remarkable anything is possible. NEVER in the history of the Markets have they produced an 18 Day streak with one actual Pullback, the 2nd doesn't remotely count, it was a few points. ____________________________________________________ IN the face of: Macro-Economic Data plummeting to the downside Supply Chain's parked offshore rotting, Shut-Ins, Shut-Downs Inventories dissolving Valuations at ALL-TIME HIGHS Yields backing off due to DC's Instructed Twaddling ____________________________________________________ The Stock Market is the Economy, it is now well below JUNK paper. And yet it has the potential to continue the surreal rise in the face of massively deteriorating Global Economic conditions... ____________________________________________________ The Alternate - Never a down Day. We will see. - HK
FRED:PPIFIS
by HK_L61
3
DXY AnalysisTo examine the dollar index with the symbol DXY, we first go to the fundamental. Perhaps the most important data this week is the fundamental Unemployment Claims and then the Flash PMI. According to a previous chart review, whenever a lower Unemployment Claims is released, a long ascending candlestick is created in the 5-minute timeframe, and whenever it has a higher rate, a higher descending candlestick is created. Flash PMI data has had less of an impact on the market than Unemployment Claims unless it is accompanied by other economic data. Last week, most of the news about the dollar was negative or neutral. Like the PPI, which was lower than expected and caused it to fall from the range of 94.3 to the range of 93.8. I think this week the decline will continue to 93.4 or 93.2. Especially when a triangle pattern is formed. Also, the downward movement can continue to create a Higher Low compared to the previous valley. In the range of 93.6 we have this high chart that the price can react to that range. 93.23 and 92.97 can also be important ranges. On the other hand, we have a resistance above the price, which is area 94, and if it fails, the next resistance is 94.5. In lower time frames, more support and resistance levels are seen. For example, the lower side of triangle 93.8 to which the price can react. Or even the ceiling of a triangle pattern that is close to the resistance of 94.1
TVC:DXYShort
by mohamadrezaKhorsand
Pound pushes above 1.38, GDP nextThe British pound has punched above the 1.38 level in the Thursday session. GBP/USD is currently trading at 1.3858, up 0.63% on the day. After posting three straight days of losses, the British pound has rebounded strongly on Thursday. The US dollar is in retreat against the majors, despite a positive unemployment claims release earlier in the day. Claims fell to 310 thousand, down from 345 thousand a week earlier. We'll get another look at US inflation data on Friday, with the release of PPI for August expected to indicate that inflation remains red-hot. The consensus stands at 6.5% (YoY) compared to 6.2% in July. The Federal Reserve continues to insist that the surge in inflation is transitory and has been reluctant to respond with a tightening of policy, fearing that the time is not ripe for a scaling back of QE. Still, more investors are sure to join the skeptics if inflation continues to remain at high levels in the final months of 2021. In the UK, the markets will be treated to a data dump on Friday. The key events are GDP and Manufacturing Production. With the Delta variant of Covid continuing to hurt economic growth, July GDP is expected somewhere around zero, which could mean a small decline. Manufacturing Production is also expected to be sluggish with a forecast of 0.1% (MoM). We could see some strong movement from the pound, depending on the performance of these two releases. There is resistance at 1.3924. Above, there is resistance at 1.3988, just below the symbolic line of 1.40. On the downside, we have support at 1.3763 and 1.3666
by OANDA
CPI / PPI - Inflation highest in US History"Consumer Prices rise in July, but rate of inflation slows" Yeah, Nah. Bullshit. Fed minutes released next Wednesday will show an increased number of Federal Reserve Board of Governors favor Taper. The count of those in favor now stands at 6 up from 2. Jerome Powell's recent Press Conference demonstrated Inflation is not going down. "The increases will happen, we're not saying they will reverse. That's not what 'Transitory' means. It means that the increases in Prices will happen, so there will be Inflation, but the process of Inflation will stop." ".....but you don't have an Inflation Process...." Rents continue to explode higher, yet to be fully appreciated by the CPI, that's dead ahead.
C
by HK_L61
Will Business Confidence shake up sleepy AUD?The Australian dollar has started the week with a whimper. Currently, AUD/USD is currently trading at 0.7620. Australia releases the NAB Business Confidence early on Tuesday (1:30 GMT). Business confidence continues to show stronger optimism, rising to 16 in February, up from 10 beforehand. The Australian economy has recovered remarkably well from the Covid-19 downturn - unemployment has dropped below 6% and commodity prices are rising as the global economy finds its footing.  A major sore point in the country's vaccine rollout. Australia had banked on the AstraZeneca vaccine for most of 26 million residents and had planned to vaccinate almost all by the end of 2021. However, with recommendations that people under 50 should not receive the AstraZeneca shot, the government has had to abandon this goal and is scrambling to find millions of Pfizer shots.   For years, US inflation has been low and off the radar of investors. With plenty of pent-up demand due to the Covid crisis, inflation has moved higher and has become a central focus for the market over the past several months. On Friday, the US released the March Producer Price Index, which measures inflation at a wholesale level.  Both the headline and core readings accelerated in March and beat the forecast. Headline inflation rose 1% MoM and 4.2% YoY  - the latter to its highest level since September 2011. Core PPI, which excludes food and energy prices, climbed 0.7% MoM and 3.1% YoY. The annual rate matched a high last seen in February 2011. With PPI numbers higher than expected, the markets are keeping a close eye on consumer inflation data (Tuesday, 12:30 GMT). If CPI beats the forecast, that could force the Federal Reserve to re-evaluate its pledge not to raise rates prior to 2024. The Fed isn't even discussing tapering its QE programme, but rising inflation could lead the Fed to reconsider reducing QE if it is concerned that the economy may overheat if it doesn't take action. AUD/USD faces resistance at 0.7668. Above, there is resistance at 0.7717. On the downside, 0.7579 is the first line of support. This is followed by support at 0.7539
by yesfish
THE PRODUCER PRICE INDEX AND THE MARKETSThe Producer Price Index (PPI) measures the average change over time in the selling prices received by domestic producers for their output. In other words, the PPI measures the prices offered to manufacturers of goods and services, in contrast to the CPI which measures the prices consumers (end-users) pay to obtain the good or service. The prices included in the PPI measure the first commercial transaction for products and services. This was the main reason for compiling such an Index in the first place, i.e. to measure price changes in goods sold in primary markets before they reached the final stage of production at the retail market level. Overall, the PPI is another indicator of the purchasing power of money and is an important tool in the design and conduct of monetary and fiscal policy. As you can guess, an increase in the PPI would signal that sellers are obtaining higher prices for their products and services and as a result, producers have either chosen to increase their price margins or they are witnessing higher demand for their products and services. To confirm which of the two holds we need to observe the CPI inflation over the past months. If the CPI inflation is in line with the PPI inflation, then we can confirm that price increases are due to higher demand and not because of higher margins. Even in the case of higher margins, the PPI serves an important cause: if producer prices have increased due to higher margins then we can expect that CPI prices (i.e consumer prices) will also be increasing in the future. Hence, the PPI can also serve as a proxy of future inflation. The rationale in regard to how the PPI affects stock and currency markets is similar to the usual CPI. If the PPI figure is higher than expected then firms are expected to generate higher profits, hence the stock market should rise. In contrast, if the PPI is lower than expected, the stock market should drop. Regarding the stock market, if the currency market expects a high PPI growth rate, then the currency should depreciate. Otherwise, if PPI is higher than expected and abides with the CPI path the currency should rise. Note though that the reactions should be much smaller compared to CPI ones, for the simple reason that the PPI is viewed as a precursor of the CPI. This prediction is supported by the market behaviour on September 12, 2018. The PPI came out less than expected, at 2.3%, compared to expectations of 2.7%. This prompted a negative reaction in the FX market, as the Dollar Index dropped by 5 pips. Similarly, the USA500 also dropped by 1 point on the announcement. While the market moved in the expected direction, the price volatility was not as large as in the CPI case. DR. Nektarios Michail Market Analyst HotForex Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
TVC:DXY
by HotForex