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U.S. Producer Prices Rise Less Than Expected In April

By:
Vladimir Zernov
Updated: May 12, 2023, 07:22 GMT+00:00

Treasury yields tested new lows as traders bet on a less hawkish Fed.

SP500

In this article:

Key Insights

  • PPI and Core PPI grew 0.2% in April.
  • Initial Jobless Claims increased from 242,000 to 264,000. 
  • U.S. dollar pulled back from session highs as Treasury yields declined. 

Initial Jobless Claims Exceed Analyst Expectations

On May 11, U.S. released Producer Prices reports. The reports showed that PPI increased by 0.2% month-over-month in April, compared to analyst consensus of +0.3%. Core PPI grew by 0.2%, in line with analyst expectations. The reports indicated that inflation was slowing down.

Not surprisingly, Treasury yields tested new lows after the release of PPI data. Traders bet on a less hawkish Fed as it looks that previous rate hikes have already put material pressure on inflation.

Today, traders also had a chance to take a look at the Initial Jobless Claims report, which indicated that 264,000 Americans filed for unemployment benefits in a week. Analysts expected Initial Jobless Claims of 245,000. Continuing Jobless Claims increased from 1.8 million to 1.81 million.

Gold Gains Ground As Treasury Yields Decline

U.S. Dollar Index declined towards the 101.70 level after the release of PPI reports as traders reacted to the pullback in Treasury yields.

Gold tested the $2040 level as lower Treasury yields and weaker dollar were bullish for gold markets. It should be noted that traders stay cautious near all-time high levels.

SP500 is mostly flat in the premarket trading session. While lower yields are bullish for stocks, traders are worried about rising Initial Jobless Claims, which show that economy feels the pressure from high interest rates.

For a look at all of today’s economic events, check out our economic calendar.

About the Author

Vladimir is an independent trader and analyst with over 10 years of experience in the financial markets. He is a specialist in stocks, futures, Forex, indices, and commodities areas using long-term positional trading and swing trading.

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