On Tuesday, in the US, the Producer Price Index is due. Analysts at Wells Fargo, suspect that the weakness in the manufacturing sector may cause producer prices to come in slightly below expectations.
Key Quotes:
“The Producer Price Index has not been as closely followed as it has been in the past largely because the revised survey has not been as good a predictor of future trends in the CPI. That said, the headline and core data look very similar to the CPI, with headline finished goods prices up 1.7% year-over-year and prices excluding food and energy items up 2.4%.”
“Producer prices are more sensitive to swings in the business cycle, however, particularly in manufacturing and construction. The trade war has influenced the data, as prices for materials and inputs that compete with imports have been pulled higher.”
“We suspect that the weakness in the manufacturing sector may cause producer prices to come in slightly below expectations. We expect both the overall and core PPI to rise just 0.1%, which is slightly below the consensus for the core PPI.”
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