USD: PPI and CPI monthly

Steady or not, here I come

The East Coast has been in a deep freeze that even a good week on the markets won’t thaw. The Producer Price Index (PPI), due out on Thursday 11th January at 1.30pm GMT, has been steady at 0.4% since October’s data. The Consumer Price Index (CPI), due out on Friday 12th January at 1.30pm GMT, has been rather more volatile with no clear trend for many years.

Both data impact how the markets view USD because of their connection to the domestic economy, the biggest driver of USD value. PPI impacts inflation and it’s interesting to note recent news, according to the FT, that market investors are currently choosing funds that protect against inflation. The target rate of 2% is close to the truth as things stand so things seem steady for Federal Reserve Bank’s new Chair, Powell, when he starts next month.

Powell will be keeping a close eye on the less-predictable CPI due the Reserve Bank’s mandate to contain inflation. A low figure this week will probably be seen by most as a good result.