US: Annual PPI rises to 9.6% in November vs. 9.2% expected

• The YoY rate of PPI hit 9.6% in November, a fresh record high going back to 2011. 
• Risk appetite took a knock, though the US dollar was little moved in response to the data. 

The headline US Producer Price Index (PPI) rose at an annual pace of 9.6% in November, according to the latest report from the US Bureau of Labor Statistics on Tuesday. That marked a new series record high (PPI was first reported back in 2011) and was above the median economist forecast for 9.2%. MoM, PPI came in at 0.8% in November, also well above expectations for a 0.5% MoM gain. 

In terms of the core measures of PPI, the YoY rate rose to 7.7% in November, well above expectations for 7.2% and last month's 6.8% reading. That was driven by a 0.7% MoM pace of core price growth, which exceeded expectations for a 0.4% rise and marked an acceleration from last month's 0.4% reading. 

Market Reaction

Risk appetite has taken a hit in the aftermath of the latest, concerning PPI report, which shows inflationary pressures on the supply side running significantly hotter than forecast. S&P 500 futures dropped from above 4660 to current levels under 4650 and are now down about 0.7% in pre-market trade, WTI slipped under $70.50 and hit its lowest point since December 7 in the $70.20s.

The DXY has seen a two-way reaction, despite the hawkish implications the report is likely to have on Fed policymaking decisions (it will up the pressure on them to tighten policy faster). For now, the DXY continues to trade in the low-96.00s and in the red by about 0.2% on the day.