The Zhitong Finance App learned that the overall US PPI data for October fell short of expectations, which slightly cooled the market's bets on the Fed's interest rate hike. According to data released by the US Department of Labor on Friday, the US producer price index (PPI) rose 6.5% year on year in October. The previous value was 6.3%, the highest level since November 2022, but lower than market expectations of 6.6%; the month-on-month increase was 0.3%, lower than market expectations of 0.4%, and the previous value was 1.3%. After excluding food and energy projects, the core PPI rose 5% year on year, in line with market expectations. The previous value was 5%; the month-on-month increase was 0.3%, also in line with market expectations. The previous value was revised from 0.70% to 0.8%.
After the US CPI data for October completely exceeded expectations this Tuesday, the market has basically completed pricing for the 25 basis point rate hike of the Federal Reserve meeting on December 8-9, and bets on the 50 basis point rate hike have also heated up. However, the overall PPI data for October released on Friday fell short of expectations, the core PPI data was in line with expectations, and interest rate hike bets were not further strengthened. After the data was released, the yield on 2-year US Treasury bonds, which are sensitive to monetary policy, recently fell 2.64 basis points to 4.853%. The three major US stock index futures extended gains. Spot gold rose by about $20 in the short term and is now reported at $3894.43 per ounce.
Although the latest PPI data did not reinforce market bets on the Fed's interest rate hike, Federal Reserve officials have recently made more hawkish statements, “adding fire” to rising expectations of interest rate hikes in addition to economic data. The next focus of the market will be on the October PCE price index, which will be announced on November 25 EST. This data is the Federal Reserve's preferred measure of inflation. Against the backdrop of the recent rise in inflationary pressure in the US, the October PCE data, especially the core PCE data, will be an important reference for judging the direction of the Federal Reserve's monetary policy in December.