A sign of how closely-watched inflation data will be
The number one US economic indicator at the moment isn't non-farm payrolls and yesterday's retail sale report proved it wasn't a market driver.
It's anything to do with inflation. The CPI and PCE reports are the top reports but data on pipeline pressures or wages is also critical.
PPI isn't often a market mover but when the only thing holding the Fed back from certain rates cuts is unease about inflation, then every part of the price picture matters. The thing is, the PPI is driven by commodity prices and we already know they're falling.
In any case, fractionally higher PPI numbers were still enough to send the US dollar 15 pips higher across the board (although gains are beginning to fade). The PPI rose 0.2% compared to 0.2% m/m expected.
Either that, or the market has an appetite for US dollars and that was a convenient excuse. We'll get a better picture at 1315 GMT when US industrial production numbers are released. 45 minutes later UMich consumer sentiment (including inflation expectations) are due. Check the economic calendar for details.
