In light of that strong PPI number this morning, tomorrow's release of the CPI will perhaps take on some added significance. The market is expecting a 0.3% rise compared to the 0.2% rise last month. When food and energy are excluded, the consensus is a 0.2% rise.
Interestingly, the market is expecting industrial production to have actually fallen in April. The number in the market is a 0.1% decline compared to a previous month 0.7% increase.
Jobless claims are expected at 320K compared to the previous 319K.
The huge rally in the bond market continues at this hour. Yield on the Ten Year has fallen to 2.548%. That is astonishing given the PPI reading.
It is also helping to explain the continued strength in gold which thus far has been holding above $1300.
Copper, after moving lower on China news yesterday is now moving higher on China news today... Think about that for a moment and then realize why trading commodities is such a difficult game for so many people starting out.
Crude oil is up after the EIA released data showing an unexpected BUILD in supplies. However gasoline stockpiles fell 772,000 barrels when the market was looking for a 100,000 increase. Distillate stocks fell 1.1 million barrels against an expected 600,000 increase.
The products number kicked crude back up after it had an initial knee-jerk response lower. Crude is now trading near $102.50, and is back above the key $100 barrel mark. Coming on a day in which the PPI was sharply higher, higher energy prices are fanning the inflation fames.
I shudder to think where we would be here in the US were it not for this massive shale oil production.
"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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