$DXY: Core PPI Miss Lifts September Rate Cut Odds

Wholesale inflation cools to 0.2% vs 0.3% forecast; Fed pivot path clears for equities.

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Key Points

Core PPI 0.2% MoM vs 0.3% consensus; annual 4.7%.
Lower producer costs reduce pressure on consumer prices.
Increases probability of September Fed rate cut.
Short USD/JPY and buy S&P 500 futures.

What To Watch

Fed funds futures pricing for September cut.
USD/JPY break below 148.00.
S&P 500 support at 5,400.

Market Analysis

How the tape may move from the last update’s mark — not from the open, and not the session % already printed.

The PPI miss reduces inflation expectations, boosting equity valuations and weakening the dollar as rate cut odds rise.

Expected Move From Here -0.5% to +1.5% From last update, not from the open

Certainty 75%

Why

PPI is a leading indicator for CPI. A miss of this magnitude typically triggers an immediate repricing of Fed funds futures. The correlation between PPI misses and DXY weakness is historically strong. The range reflects the immediate tape reaction to the data print.

Related Sources

𝗕𝗮𝗻𝗸XRP on X: "Two straight misses now CPI yesterday, PPI today, both cooler than expected. Core PPI rose just 0.2% (vs 0.3% forecast), annual core easing to 4.7%. Wholesale inflation cooling this fast = less cost pressure to pass on to con — brave