Marketwatch North America

Daily Insights
January 12, 2024

U.S. Producer Prices increased 1.0% Y/Y during December, below the 1.3% estimate. And M/M PPI was -0.1%, +0.1% estimate. December Core PPI (excludes food and energy) was +1.8%, below the 2.0% estimate and the lowest reading since January 2021. All six measures of producer inflation either matched or were below market estimates and 2/6 were below November’s results. Today’s data is welcome news to the Fed as it neutralizes yesterday’s higher-than-forecast inflation at the consumer level (CPI) and keeps the overall inflation picture trending lower.

U.S. Treasury yields are lower in the near tenors and higher in the far tenors (>10-years), flattening the inverted curve. With inflation’s decline back on track (at least with today’s data), the implied probabilities of quarter point rate cuts at the FOMC’s mid-year meetings have spiked: 112% for May, 118% for June, and 101% in July.

The dollar is lower against the G10 pairs except for a 0.08% gain vs. the EUR. Today’s dollar losses neatly reverse yesterday’s gains. The dollar index is about flat, +0.05%, and midway between near-term support at 102.00 and resistance at 102.50.

The majority of global equity indexes are in the green today and futures are signaling higher opens for the S&P 500 and Nasdaq.

Gold has spiked, +1.61% today at $2,061.20/oz after trading as low as $2,013.13/oz. yesterday.

Next week’s economic calendar includes Retail Sales for December, Industrial Production, and preliminary Consumer Sentiment.

Economic Calendar

USD - Core PPI m/m
USD - PPI m/m

Market Indicators

Currency Pairs
Pair High Low
usd/jpy 145.567 144.639
eur/usd 1.09852 1.09359
gbp/usd 1.27844 1.27195
aud/usd 0.67163 0.66778
usd/cad 1.3386 1.33474
eur/gbp 0.86067 0.85879
usd/mxn 16.9221 16.8293
Equities and Commodities
S&P 500 4786.76
NASDAQ 16843.9
DOW 37682.2
GOLD 2055.5
SILVER 23.28

This document is for information purposes only and does not constitute any recommendation or solicitation to any person to enter into any transaction or adopt any trading strategy, nor does it constitute any prediction of likely future movements in exchange rates or prices or any representation that any such future movements will not exceed those shown on any illustration. All exchange rates and figures appearing are for illustrative purposes only. You are advised to make your own independent judgment with respect to any matter contained herein.