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PPI Does Its Best CPI Impression. Bonds Like It
PPI Does Its Best CPI Impression. Bonds Like It
The Producer Price Index (PPI) is not normally a huge market mover, but it has its moments of moderate impact. Today is such a moment as PPI did its best to mimic yesterday's sharply lower CPI. There were also big revisions to previous months which brought annual PPI a full 1.0% lower from last month's initial reading (5.5% today vs a 6.0 previous reading, revised from 6.5% when initially reported). Fuel prices loom large in this data, as evidenced by Core monthly PPI at 0.2 vs 0.3. Unlike yesterday, most of today's shift was seen in revisions to previous months--especially May (headline revised from 1.1 to 0.6). Laundry list of little numbers aside, bonds like it. Fed Funds Futures improved. Treasuries and MBS have gone from modestly weaker to moderately stronger after the report.
Why Didn't Bonds Rally More After CPI
| Time | Event | Period | Actual | Forecast | Prior |
|---|---|---|---|---|---|
| Wednesday, Jul 15 | |||||
| 12:00AM | Roll Date - UMBS 15YR, Ginnie Mae 15YR | ||||
| 8:30AM | Jun PPI m/m (%) | Jun | -0.3% | 0% | 1.1% |
| 8:30AM | Jun PPI y/y | Jun | 5.5% | 6.2% | 6.5% |
| 8:30AM | Jun Core PPI y/y (%) | Jun | 4.7% | 5.2% | 4.9% |
| 8:30AM | Jun Core PPI m/m (%) | Jun | 0.2% | 0.3% | 0.4% |
| 8:45AM | Fed Williams Speech | ||||
| 10:00AM | Fed Chair Warsh Testimony | ||||
| 12:00PM | NOPA Crush Report (%) | ||||
| 1:00PM | Fed Cook Speech | ||||
| 2:00PM | Fed Beige Book | ||||
| 6:30PM | Fed Musalem Speech | ||||
| Thursday, Jul 16 | |||||
| 12:30PM | Fed Logan Speech | ||||
| 7:00PM | Fed Jefferson Speech | ||||
| 8:00PM | Jul/17 Mortgage Market Index | Jul/17 | 259.1 | ||
| 8:00PM | Jul/17 MBA Refi Index | Jul/17 | 821.9 | ||
| 8:00PM | Jul/17 MBA Purchase Index | Jul/17 | 157.2 | ||
| 8:00PM | Jul/17 Crude Oil Inventory (ml) | Jul/17 | |||
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