Is US inflation really going to peak?
benefited from a sharp decline in gasoline prices. After the year-on-year growth rate of CPI in July fell slightly, the year-on-year growth rate of PPI in July also fell significantly, with a negative month-on-month growth rate, the first time in more than two years.
PPI recorded a negative value for the first time in more than two years
On Thursday, August 11, data released by the U.S. Department of Labor showed that the U.S. PPI (Producer Price Index) in July increased by 9.8% year-on-year, lower than the expected 10.4% and 11.3% last month; it fell by 0.5% month-on-month, with an expected increase of 0.2%, with an increase of 1.1% in the previous value. The growth rate of recorded a negative value for the first time since April 2020.
Excluding food and energy with high fluctuations, the US core PPI rose 7.6% year-on-year in July. Although it was lower than the expected 7.7% and 8.2% of the previous value, is still close to the historical high , and the core PPI rose 0.2% month-on-month, lower than the expected and 0.4% of the previous value.
It is worth mentioning that PPI has surpassed CPI for the 19th consecutive month, which means that American companies are still facing huge profit margin pressure.
gasoline price dropped sharply
classification, the final demand commodity price fell by 1.8% month-on-month in July, which had previously risen for six consecutive months, and the decline was the largest since April 2020. 80% of these can be attributed to the decline in gasoline prices (declined by 16.7%); diesel, gas fuel, oilseed, scrap steel and grains also declined. In comparison, egg prices rose by 43.1%. Industrial chemicals and electricity prices have also risen.
final demand service price rose 0.1% month-on-month in July, the third consecutive month of increase. Fuel and lubricant retail led the gains, with profit margins rising 12.3%. The prices of securities brokerage and trading (partial), hospital outpatient services, automobile and auto parts retail, and passenger transport (partial) related services all rose. By comparison, portfolio management prices fell by 7.9%. Securities brokerage and trading, investment consulting prices, food and alcohol retail, and long-distance motorcycle transportation prices also fell.
market response is not big
After the data was released, the rise in US stock futures slightly expanded, with Dow futures and Nasdaq futures rising 0.7%.
USD Index fell 10 points in the short term to 104.76.
Spot gold has not changed much.
9 hike rate 50 basis points?
Inflation data released on Wednesday showed that the US CPI rose 8.5% year-on-year in July, better than the market expectation of 8.7%, and fell sharply by 60 basis points from the previous value of 9.1%. 7 April CPI rose month-on-month , which was also better than the market expectations of 0.2%, and the growth rate fell sharply compared with the previous value of 1.2%.
combined with PPI data, U.S. inflation eased slightly in July, but inflation pressure was still close to historical highs. The Fed's third consecutive rate hike in September fell back.
CME’s FedWatch tool shows that the probability of the Federal Reserve raising interest rates by 75 basis points in September fell to 33%, and the probability of raising interest rates by 50 basis points fell to 67%. However, the final rate hike still depends on whether the inflation rate will drop further in August.
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