Yesterday’s CPI data was bearish, with both the core monthly and annual rates exceeding expectations!
Tonight will bring the PPI data and the U.S. September retail sales monthly rate, both of which are also somewhat related to inflation.
PPI is the Producer Price Index. A reported figure > the expected figure is bearish,
and the same applies to the retail sales monthly rate: reported figure > expected figure = bearish!
Simply put:
Rising raw-material PPI (Producer Price Index) → higher production costs for factories → after some time, factories pass on the higher costs → higher supermarket retail prices (CPI rises) → higher inflation!
This time, CPI moved ahead of PPI, which is a rare occurrence.
Retail sales monthly rate:
This measures the total amount ordinary people spend buying physical goods!
In other words, when ordinary people are willing to spend heavily (strong retail data) → strong demand for goods → merchants dare to raise prices → inflation rises!
The relationship with CPI is that CPI measures how much prices have risen, while retail sales measures how much money was spent in total—it reflects consumption capacity! Sufficient consumption capacity and a willingness to spend are also among the drivers of inflation.
Strong consumption (high retail sales) → strong demand → more likely to push CPI prices higher
We will not forecast the data. It is most prudent to assess whether it is bullish or bearish after the data is released, based on the reported figure.
Next comes Waller’s speech on Friday. This CPI reading was bearish, so let’s see whether Waller’s remarks are dovish or hawkish!
There are basically no other macroeconomic events this week, so we can just look forward to the weekend. #美国9月CPI超预期 #美国9月PPI数据公布