Today we will see the release of the precursory PPI (Producer Price Index). PPI is widely used to make predictions about the CPI which is the baseline figure for monetary policy decisions and historically, the target for the Fed’s interest rate decisions.
Trading Event: Producer Price Index 12:30 GMT
- PPI for the previous month came in at a 0.5% increase.
- Import prices fell 0.4% in April driven by a drop in fuel prices, in particular gas and petroleum prices.
- Although food prices have been rising in the last year, prices remain down by 0.3%.
- Some rise in export prices may make up for the reduction in import demand.
- Despite some improvements in economic growth, there is likely to be a soft improvement in producer prices, with a forecasted increase in 0.2%.
- Banc de Binary analysts predict that PPI may struggle to meet expectations, indicating potential PUT position in the USD/JPY.