American Producer Prices and How Financial Market Investors Will View Them

Markets are anticipating significant data from the United States today regarding core producer prices,
excluding food and energy for February, on a monthly and annual basis.

Topic

Details

Details

Data for January showed a decrease in annual producer prices from 1% to 0.9%, contrary to expectations which had predicted a decline to 0.6%.

The annual core producer prices for January 2024 showed a positive 2% compared to the same period last year,
higher than the December 2023 reading of 1.7%, and also higher than the negative expectations that anticipated a drop to 1.6%.

As for the monthly core producer prices, excluding food and energy for January,
it showed positivity with a 0.5% increase, marking the highest rise within a year.

Investors’ eyes are on the upcoming reading and what the economy has offered for February 2024
. Experts expect a decrease in the monthly core producer prices to 0.2%,
and a negative turn in the annual core producer prices to 1.9% from 2%.
Predictions are positive for the annual main producer prices, forecasting a 1.1% increase,
which would be higher than the last reading of 0.9%.

The anticipated numbers will provide a proactive view of the effectiveness of the American economy amidst expected monetary tightening to end this year.
A clear decline in the forthcoming numbers, reading lower than the negative expectations,
would signal that the economy is indeed suffering due to high interest rates,
which could bolster expectations for a rate cut in June of the current year.

This could lead to a clear negative impact on the US dollar index, driven by negative data and increasing expectations of more than two rate cuts in 2024.
Conversely, if the expectations are exceeded and February’s reading is positive,
it would be a calming boost for the American bank, which would then consider waiting for inflation to decrease towards the targeted 2%
before starting to cut interest rates.
This could positively affect the US dollar index and negatively impact American stock indices.

American Producer Prices and How Financial Market Investors Will View Them

American Producer Prices and How Financial Market Investors Will View Them

Related Topics