Silver as an investment

Producer Prices Surge At Fastest Rate Since 2011

After yesterday’s surge to 7 year highs in consumer price inflation had zero impact on bonds or stocks, a very different regime than just a few months ago, one wonders what today’s producer price inflation print will do.

 

After slowing in April to +2.6% YoY, PPI surged in May by 3.1% YoY – the biggest price rise since Dec 2011…

Energy prices dominated the increase – rising 4.6% YoY.

Final demand goods details:

Half of the advance in the index for final demand goods is attributable to a 9.8-percent increase in gasoline prices. The indexes for jet fuel, fresh and dry vegetables, diesel fuel, beef and veal, and light motor trucks also moved higher. In contrast, prices for chicken eggs fell 31.2 percent. The indexes for residential natural gas and for plastic resins and materials also decreased.

Final demands Services details:

One-third of the May advance in prices for final demand services is attributable to a 1.5-percent rise in margins for machinery, equipment, parts, and supplies wholesaling. The indexes for chemicals and allied products wholesaling; outpatient care (partial); apparel, footwear, and accessories retailing; food retailing; and truck transportation of freight also moved higher. Conversely, prices  for guestroom rental fell 4.4 percent. The indexes for fuels and lubricants retailing and for hospital inpatient care also moved lower.

Core PPI also rebounded from April, rising at 2.6% YoY.

And if ISM surveys are to be believed, PPI has further to rise…

Just like yesterday’s CPI, bond yields are underwhelmed…

2Y Yields are up a shocking 1bps…

50bps rate-hike anyone?

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And once again more conspiracy theories come out…