Producer Inflation Preview: The Hidden Factor That Could Tame CPI Enthusiasm
Portfolio Pulse from Piero Cingari
The annual inflation rate in the U.S. ticked up to 3.2% in July, slightly below the anticipated 3.3%. The focus now shifts to the producer price index (PPI) inflation gauge due for release on Friday. Economists predict a 0.7% increase in the annual PPI for July, breaking a 12-month decline. The Bloomberg Commodity Index, tracked by the iShares Bloomberg Roll Select Commodity Strategy ETF (CMDY), surged almost 6% in July, potentially impacting the PPI as commodities make up about 30% of the PPI basket. However, investors believe the Federal Reserve is about to end its rate-tightening campaign.
August 10, 2023 | 8:41 pm
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NEUTRAL IMPACT
The iShares Bloomberg Roll Select Commodity Strategy ETF (CMDY) tracks the Bloomberg Commodity Index, which surged almost 6% in July. This could potentially impact the PPI, as commodities make up about 30% of the PPI basket.
The Bloomberg Commodity Index, which CMDY tracks, surged in July. This could potentially impact the PPI, as commodities make up a significant portion of the PPI basket. However, the exact impact on CMDY is uncertain as it will depend on various factors including the overall market reaction to the PPI data and other economic indicators.
CONFIDENCE 85
IMPORTANCE 70
RELEVANCE 80