Trade Desk Thoughts - Euro-Area PPI

Euro-Area PPI Actual -0.5%, Expected -0.5%, Previous 1.3% (Revised from 1.1%

Release Explanation: The PPI measures the rate of inflation of manufacturers when purchasing Goods and Services; the rate of Inflation at the factory Gate. An increase in the price of raw Goods and services usually gets passed on to the consumer, therefore this is the first stage on Retail Inflation.

Trade Desk Thoughts: The Euro-area PPI showed deflation for the first time in almost two years. The release number of -0.5% was in-line with analyst forecasts. The number released for the month of July was revised up from 1.1% to 1.3%. On a monthly basis, most sub-indexes recorded small gains, except the energy index, which fell 2.5%. Year over year, producer inflation in the Euro-area is up 8.5%, with the largest increases in the energy index, which rose 22.5% since last year and intermediate goods which gained 6% from one year earlier.

Forex Technical Reaction: The euro gained 20 pips at the time of the release, recovering some of the lost pips during the overnight session. Overnight, the pair tumbled 90 pips, reaching a new low for the current year

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