📊 U.S. June PPI data hits at 8:30 PM tonight! Upstream inflation signals are key—combine it with CPI to gauge market direction

Yesterday’s CPI headline cooled noticeably (forecast 3.8%), but core remained sticky. Tonight’s PPI (Producer Price Index), as an upstream indicator, will further validate the inflation path.

Street consensus expectations:
- Headline PPI: MoM 0.0% ~ +0.2% (prior +1.1%), YoY about 6.3% (prior 6.5%)
- Core PPI (excluding food and energy): MoM +0.4%
- Ex food/energy/trade services: MoM slows to +0.4% (prior +0.8%)

My quick personal take:
- Base case: Data meets expectations or is slightly softer (energy drag is clear) → strengthens the “inflation peak and roll over” narrative. The chance of a September rate hike (currently 50%+) may dip a bit; U.S. Treasury yields could pull back, and tech/growth stocks may receive support.

- Risk case: If core or core goods run hotter than expected → confirms cost pressures are still working through the pipeline. Rate-hike pricing could heat up further, and market volatility would likely increase.

- PPI often leads CPI signals; if upstream pressure persists, it will impact corporate profits and subsequent consumer inflation.

- Add in Middle East geopolitical factors (oil price volatility)—tonight’s data is the final crucial inflation piece ahead of the Fed’s July meeting.

To sum up: if PPI cools as expected, it’s a positive continuation for CPI; if stickiness comes in hotter than expected, it reinforces a hawkish path. In the short term, the odds of a “soft landing” look higher, but geopolitics and core stickiness remain variables.

Do you think tonight’s PPI will be “good-news confirmation,” or will it keep pushing up rate-hike expectations? We’ll know tonight! 👀