Wednesday introduced the primary of this week’s two key inflation studies. While the Producer Price Index (PPI) is the lesser of the 2 by way of potential influence on charges, it got here in far sufficient under expectations to make for a measurable enchancment.
The catch is that the advance in query pertains to the underlying bond market. Before the info, bonds have been barely weaker, thus suggesting barely larger charges. But lenders do not launch their charges for the day till a couple of hours of buying and selling have commenced. This leaves time for markets to react to early AM knowledge akin to right this moment’s PPI.
Bottom line, PPI helped bonds which, in flip, helped charges maintain regular versus drift a bit larger.
