PPI was expected to come in at 0.4%.  Is the 0.1% print a sign of waning inflation, or could it be confirmation of the coming recession?

continued for members…

ES is within 2 points of the .786, a natural place for a reversal since it didn’t happen at the .618. EURUSD is pushing through the red channel top and white channel backtest, closing in on the .618. It’s possible this was just to facilitate SPX’s .786 tag, but the PPI print is at least partly responsible. Remember, oil/gas prices won’t allow this dip in inflation to last unless they drop substantially.

USDJPY is almost to our SMA200 target… …while DXY has broken through support and backtesting the white channel.Oil and gas are both off a little after goosing the equity markets. The bigger question is what happens with the 10Y? Is the low inflation narrative strong enough to undo the breakout? I think not, but it could go either way. Stay tuned…