PPI surprise — how to watch it tonight.

Data > 6.5%
Upstream prices don’t fall but instead rise, which likely means the following CPI inflation prints will also trend stronger. The market will immediately price in the Fed keeping a hawkish stance; rate-cut expectations for this year will cool sharply, and even discussions of restarting rate hikes may resurface. The US dollar index rallies strongly, and risk assets such as gold, BTC, and ETH face simultaneous downward pressure. The market will quickly turn lower; the core idea is to focus on shorts on rebounds.

6.2% < Data < 6.5%
Inflation edges down slightly, but the drop is smaller than what the market hoped for. Divergence between bulls and bears intensifies, and the near-term market will see violent choppy swings; rapid needle-like spikes that sweep stops are the norm. It’s unlikely to form a one-way trend. For positioning, it’s not suitable to heavily bet; stay on the sidelines and wait for the data to be digested before deciding direction.

Data ≤ 6.2%
Prices on the upstream production side clearly fall, and easing inflation signals land. The market will bet on the Fed slowing its tightening policy, and rate-cut expectations rise again. The dollar weakens, and capital flows into risk assets; the “big cake” and “second cake” come back with a rebound repair move. The main approach is to look for buying on pullbacks at lower levels.