PPI rose only 0.1% MoM in May, but the annual rate was still elevated at 2.6% (2.7% less food, energy and trade services.) It leaves the FOMC in a place where they can delay any rate cuts in order to see how tariffs affect prices.

Futures have made up some of their losses following yesterday’s .886 tag.

continued for members…

The next few days will be critical to the rebound. It’s either a very deep retrace or the first stage of a renewed bull market.

The DXY is following our script and is now at a 2 1/2 year low on its way to 96.70 as the EURUSD is establishing new highs.

Oil and gas are both off following strong moves yesterday – interesting in light of reports that Israel is planning to fire missiles at Iran. Note that the 10Y, which saw a strong auction yesterday, dropped in spite of those strong moves……and is dropping even more today.

This suggests to me that interest rates are moving more in sympathy to equity correction fears than to inflation cues.

Stay tuned…