In data released today PPI (Producer Prices) for September topped estimates, keeping the Fed’s concerns over inflation intact. The year-over-year Final Demand component was reported 2.2%, well above the 1.6% market forecast and was the third consecutive increase since June 30th. Even excluding volatile food and energy prices, the monthly PPI measure increased to 0.3%, above the 0.2% estimate.
U.S. Treasury yields have declined in the wake of the PPI data, especially in the far-dated tenors with the 20–30-year tenors trading down more than 0.09%.
The USD is mixed vs. its G10 counterpart currencies, +0.30% vs. NZD and +0.14% vs. AUD, while -0.30% vs. CHF and -0.20% vs. GBP. The dollar’s mixed results today are also seen in the U.S. Dollar Index which is -0.09% at 105.71, and setting up for the 7th consecutive daily decline.
USDMXN is -0.50% today, the pair’s 4th consecutive daily decline since peaking near 18.5000 on Oct 6th. The dollar’s rally vs. the peso was capped by long-term trendline resistance tracing back to May of 2020. Support for the pair is nearby at 17.7800 and lower at 17.5600 (50% retracement).
Spot gold prices are +0.62% today at $1,871/oz, continuing to rally after reaching a 9-month low of $1,809.50/oz only 4 days ago.
Market attention now turns to tomorrow’s CPI data in the latest update to consumer inflation trends.
