PPI increased by 2.1% YoY in January, the sharpest increase in 15 months. The monthly increase of 0.5% strongly outpaced expectations of 0.2%. 
Most of the commentary attributes the beat to transitory trade factors. Yet even core PPI increased at 1.5% YoY.
Futures initially slipped about 1 point on the news, then settled higher, paced by a vitally important breakout in USDJPY. 
DXY is also threatening new highs as EURUSD tagged our next lowest and most important downside target in years. Yes, this is one of those kitchen sink moments.
I suppose in a logic-based economy a PPI print such as this would diminish expectations of further CB easing. But, that ship sailed a long time ago. The latest numbers I’ve seen call for 60% odds of further rate cuts in July.
continued for members…
EURUSD’s new lows…
DXY’s new highs?
VIX’s usual meltdown, back below the SMA200 and a few ticks away from a failed breakout above the red TL…
All so ES could break out of this little falling channel and maintain its breakout status.
The EURUSD monthly chart is impossibly busy…
…so here’s the very simplified version:
USDJPY has broken above the top of a channel dating back to May 2015.
It’s easier to see on the close-up below.
The bond market hasn’t totally bought into the currency moves, with ZN still holding its TL from December…
…and TNX failing to break back above the TL it recently dropped through… 
…and although the 2Y is not surprisingly back above 1.40%…
the 2s10s is still tilted toward an equity correction, with worse to come if it drops through 12 bps or so.
Gold responded as it should have in a too-hot environment, temporarily (at least) registering a new high.
I have a few longer-term charts I’m working on, but this is meant to represent a potential sea-change moment. If it can last, USDJPY’s breakout is a very big deal – just like USDJPY’s breakout in 2014 or push above the .618 in 2015. But, given the coronavirus’ impact on the region, I have very serious doubts as to whether the breakout will survive.
CL’s potential bottoming is also a very big deal – just like Feb 2016’s bottom. Unless something so shocking that it breaks VIX happens again, the algos should continue to push stocks higher. Proceed with caution.