Trade Desk Thoughts - German PPI

German PPI Actual -0.6%, Expected -0.4%, Previous 2.0%

Release Explanation: The Producer Price Index (PPI) measures the rate of inflation (i.e., the rate of price changes) experienced by manufacturers when purchasing goods and services. This includes the rate of inflation at the factory gate. When manufacturers pay more for goods and services, they are likely to pass the higher costs to the consumer, so PPI is thought to be a leading indicator of consumer inflation.

Trade Desk Thoughts: The German PPI was released at -0.6% for the month of August, diverging from the market’s expectations of -0.4%. This is the first time since January 2007 that German producers have seen lower input prices. Even so, the year-over-year read still stands at 8.1%, the highest rate of inflation seen in the last decade. The largest upward pressure came from energy products in the prior months, but now this trend is reversing

Forex Technical Reaction: The Euro had a weak response to the release. Since the Asian session started, the pair has fallen 120 pips.

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