Poor round of US data

Published date: 12/12/2019

US PPI for November and Initial Jobless claims data didn't really impress this afternoon. 

Kicking off with PPI data and it showed that producers enjoyed lower costs in November and this could have been the result of some of the recent strength seen in the US dollar during the month. Having said that some analysts have noted that the data point could have a lagging effect and producer inflation could fall further. 

Inflation is a key mandate for the FOMC and producer prices can front-run the traditional CPI measure. The target for CPI is 2% or just over and if the Fed cannot meet this target there is always the option to cut rates and weaken the currency to increase the cost of importing goods.

Elsewhere, jobless claims data was also pretty weak as higher claims suggest the labour market is not as strong as NFP and unemployment numbers forecast.

Stocks declined on the news and the dollar followed suit. There are some counter issues as if the data keeps getting worse and worse the Fed may be forced to act. EUR/USD has pushed higher once again and taken out the previous wave high on the hourly chart and on the daily chart 1.1175 is the next resistance point.


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