US Producer Prices Unexpectedly Fall

PPI down a tenth of a percent it was forecast to go up three tenths and it rose seven tenths in January so there's some good news the core rate is flat after a half percent gain last month and a 410s gain forecast right you take out food energy and trade trade is not trade international trade this is Retailers and wholesalers and it's their profit margins. That's up to 10th of a percent down from six tenths But it does show So it shows some fall there on a year over year basis 4.6 percent for the headline 4.4 percent for the core We're gonna jump this at Tom. I gotta throw this in there please because this may move the markets Empire manufacturing Yeah, I saw that on 24.6 is the number it was negative 5.8 now it's negative 24.

6 so Real dry up there in the Empire manufacturing numbers new orders okay lunge down to negative 21 We're gonna do this differently this time because we've got a number of moving stories here and an exceptionally esteemed guest to join us in Seconds here Mike. I want to move away from this economic data to your interpretation and reading in the last 24 hours of how this Fed will Respond to your economic data in our financial crisis. What would you guess they will do? Well, I don't think the data today makes any difference to the Fed the Empire is a sort of tertiary index and retail sales So Americans are still hanging in there But maybe spending a little less which they'd like to see some man come down and PPI isn't going to Change everybody's minds because it's it's come down right so therefore that puts 25 Mike you and I look at retail We look at credit suise Bramo looks at the two-year Yeah, that's what we all should be looking at because what you're seeing is a complete breakdown down below 4% 3.88% as basically this is a market that has looked at PPI Inflation in the factories coming down much more than expected retail sales diminishing as expected and then a weak Empire manufacturing print We are looking at a market that's pricing out any further rate hikes and pricing a hundred basis points or more But you're a tennis fan right? Yeah, I know you like tennis and this is like going back and forth with the the bond trading I mean bond traders got to be going crazy They're their accountants are happy because of course volatility is good for profits But it's hard to get a read on what's going on with the economy when you're just looking at yields right now because they're being pushed Around so much by all kinds of news So the where will they be a week from today the yield on the published dividend of credit suise continues to rise as a price to 1.6 Well, I think we maybe even have a stop training I would be very careful here in credit suise the low was 1.5 9 7 5 quickly to that point if you take a look at German Two-year yields dropping like a stone as well 2.54 percent again What does this mean is this economic data enough to write off further rate hikes or is this a concern about credit suise? Is this a concern about the financial markets something breaking at a time of potential real for bigger concern for the ECB because they meet Tomorrow that has a week.

Bloomberg