US indices took another hit on Friday after another data release showed that inflation is far from under control. This time it was the PPI figures that sent murmurs throughout the financial world, up to 0.3% versus 0.1% expected. The Nasdaq Composite was the worst hit, dropping 0.82% on the day; the S&P 500 fell half a percent on the news, although managed to remain above 5,000 points; the Dow Jones lost a mere 0.37%.
Despite strong intra-day swings, the Dollar Currency Index finished the day completely flat, unbothered by the potential of higher interest rates for longer. Gold performed uncharacteristically well on Friday, gaining 0.44% to close back above $2000 an ounce. Chinese markets reopen today after a week-long close, which should inject some fresh liquidity into markets and into bullion in particular.
Speaking of public holidays, US and Canadian markets are closed today, paving the way for a very boring economic calendar this week. The exception arrives on Wednesday in the form of the FOMC minutes, which should shed some light on what the Fed thinks about the recent signs of high inflation. If the current CPI and PPI numbers are indeed cause for concern then any talk of rate cuts will be pushed further down the road.
The main other point of interest this week is the US jobless claims set to be published on Thursday. Consensus for the week ending 17th of February currently stands at 217k claims so expect any major deviation from this figure to play into shifting market dynamics.
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