Trade Desk Thoughts - U.K. PPI Input, U.K. PPI Output

U.K. PPI Input Actual -1.2%, Expected -1.5%, Previous -2.0%
U.K. PPI Output Actual -0.3%, Expected -0.4%, Previous -0.7% (Revised from -0.6%)

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

Trade Desk Thoughts: The U.K. economy shows signs of deflation at least when it comes to producer's input and output prices. Input prices, the price at which producers and manufacturers buy materials and fuel, fell in September by 1.2% from one month earlier. Output price, the prices at which manufacturers sell, also fell in September from one month earlier, declining 0.3%. On an annualized basis, input prices are up 24.5%, while output prices rose 8.5%. The lower reads reflect the declines in the crude oil market.

Forex Technical Reaction: The pound is trading virtually flat since the new trading week started, even though the pair has had a huge trading range, reaching 350 pips.

Written by TheLFB Trade Team, © 2007-2008 LFB Services, LLC. All rights reserved. http://www.TheLFB-Forex.com

TheLFB Risk Disclaimer can be found at http://www.thelfb-forex.com/content.aspx?id=174.

The Copying, Broadcast, Republication or Redistribution of TheLFB Content is Expressly Prohibited Without the Prior Written Consent of LFB Services, LLC.