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Daily digest market movers: Peso-Dollar tug-of-war continues after USD eases on cooling PPI

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  • US PPI inflation for the year ended in July eased to 2.2%, below the forecast of 2.3%, while the previous period was revised to 2.7% from the initial 2.6%.
  • Core US PPI inflation dropped to 2.4% YoY versus the expected 2.7%, falling even further from the previous 3.0%.
  • Rate markets edged up bets of a double rate cut from the Federal Reserve (Fed) in September following Tuesday’s PPI print.
  • According to the CME’s FedWatch Tool, rate markets are pricing in roughly 55% odds of a 50-basis-point cut on September 18, with 45% odds of at least a 25 bps trim.
  • Key US data will continue through the week with July’s Consumer Price Index (CPI) slated to print on Wednesday. Investors expect inflation figures to continue easing

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