OEXN reports: U.S. PPI increased 0. year-on-year in November9%, exceeding the previous value, compared with 13% fell further, hitting the lowest level in nearly half a year. Excluding volatile food and energy, core PPI fell short of expectations by 2% year-on-year in November.
After the release of the PPI data, the decline in U.S. Treasury yields expanded, the S&P 500 index hit a pre-market high, and the spot market did not fluctuate much, and the international **accelerated**, and the intraday increase expanded to more than 1%.
Goldman Sachs analysts said: "The year-on-year growth of PPI and core PPI in November both slowed more than expected, hitting the lowest year-on-year growth rate in five months and nearly three years, respectively, and energy*** was once again the main reason for the PPI slowdown, with food and services rising slightly month-on-month." ”
The November PPI data showed that inflation was gradually easing, and natural gas was **sharply**, which played a large role in inflation. In his view, the November PPI data is in line with the market's appetite, and the lower-than-expected data provides some reason for aggressive rate cuts.
It is worth mentioning that Yellen said that along with the decline in inflation, it is expected that in 2024, inflation may be reduced to 2%, and he pointed out that it is reasonable for the Federal Reserve to cut interest rates to keep the economy growing steadily, so the focus of the debate on Wall Street has also become a bet on when to cut interest rates, and how big the rate cut will be, in the context of recent months, the market has begun to bet that by the end of next year, the federal ** interest rate is expected to be reduced to 4%-4At the 25% level, the rate cut could reach 125bp.
"The last Fed interest rate meeting in 2023 is loud and dovish, in the short term, the Fed's ** rhetoric may strengthen the "soft landing" trade, but it remains to be seen what the final outcome will be, in the medium term, there will be a lot of uncertainty on the way to the Fed to cut interest rates, and market volatility is expected to increase." ”