US July PPI +0.8% y/y vs +0.7% expected

• Prior was +0.1% y/y (revised to +0.2%)
• PPI final demand m/m +% vs +0.2% y/y expected
• Prior was +0.1% m/m (revised to 0.0%)

Ex food and energy:

• +2.4% y/y vs +2.3% expected (prior +2.4%)
• +0.3% m/m vs +0.2% expected (prior +0.1% revised to -0.1%)
• Goods ex food and energy 0.0% m/m

More details:

• Goods +0.1% m/m
• Services +0.5% m/m
• Foods +0.5% m/m

There is some selling in bonds on these headlines and a rise in USD/JPY. US 10-year yields are up 3 bps to 4.13% since the release while USD/JPY rose around 20 pips.

That’s an outsized reaction but highlights a renewed sensitivity to inflation.

Digging through the details, distribution was a source of upside pressure on the services side.