TL;DR

The U.S. Producer Price Index (PPI) for July increased by just 0.1%, lower than the expected 0.2%, and the annual increase was 2.2%, below the projected 2.3%.
Financial markets and the crypto sector are reacting positively, with major stock indices rising and several cryptocurrencies showing gains.
The slowdown in inflation is generating speculation about potential interest rate cuts by the Federal Reserve in September.

The U.S. Producer Price Index (PPI) for July showed a modest increase of 0.1%, barely surpassing market expectations which had anticipated a 0.2% rise. This minimal difference suggests a deceleration in the inflation rate, and a decrease compared to the 0.2% recorded the previous month. On an annual basis, the PPI rose by 2.2%, also below the 2.3% forecast, although the previous annual rate was revised upwards to 2.7%.

The reduction in the index is attributed to a combination of lower service costs and modest increases in commodity prices, indicating that inflation is losing momentum.

The economic cooling is leading investors to speculate about the Federal Reserve’s future decisions regarding potential interest rate cuts in the upcoming September meeting. Attention is now focused on the upcoming Consumer Price Index (CPI) data for July, which is expected to show a 3.0% year-over-year increase, and a possible slight decrease in the core CPI to 3.2%.

Financial markets have responded positively to the PPI data. Major stock indices such as the S&P 500 and Nasdaq are showing an upward trend. This positive trend is supported by the perception that the deceleration in inflation could create a more favorable environment for financial assets.

Crypto Market Data

In the crypto market, Ethereum (ETH) is rising, showing a daily increase of 2.1% and trading at $2,725. It has managed to attract institutional investments, with cumulative inflows into ETFs exceeding $901 million.

According to Coinmarketcap, major cryptocurrencies are following the same upward trend. Bitcoin (BTC) has surpassed $61,500 after climbing 3.2% in recent hours. BNB (BNB) had a more modest performance, rising only 1% to around $524 per token. Solana (SOL) is approaching $149 after a 1.6% increase in the last day. Toncoin (TON) was notable for a slight decline, falling 1% in the last day, with its current value at $6.44. Meanwhile, XRP (XRP) is trading at $0.58, marking a 1.15% increase in the last 24 hours, while Cardano (ADA) gained just 0.7% and is around $0.3431.

As the Federal Reserve’s decisions approach, uncertainty remains regarding whether there will be a 50 or 25 basis point rate cut in September. Attention is focused on upcoming economic data, which could provide more clarity on the direction of monetary policy and its impacts on financial markets.

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Filed under: News - @ August 13, 2024 6:08 pm