February 13, 2025: US PPI & Jobless Claims Collide with UK GDP—Navigate the Cross-Market Momentum
Fresh inflation data sends mixed signals as US Producer Price Index lands alongside stumbling UK GDP figures. Here's your tactical roadmap for trading today's cross-Atlantic volatility.
Core Analysis
Key Developments:
- US Producer Price Index stands as a critical inflation gauge following yesterday's CPI settling at 3%, marking the highest level since June 2024
- UK Q4 GDP reflects growing concerns as the Bank of England slashed growth forecasts from 1.5% to 0.75%
- US GDP growth moderated to 2.3% in Q4 2024, down from 3.1% in Q3
- Brazilian markets showing strain with the Real at R$5.7631 amid local retail sales data
Market Impact Breakdown:
- Fixed Income Markets
- Mortgage rates remain elevated at 6.71% for 30-year fixed
- Bond yields particularly sensitive to today's PPI print
- Refinancing rates mirror purchase rates with 30-year refinance at 6.75%
- Currency Dynamics
- GBP/USD faces pressure from UK growth concerns
- Emerging markets led by Brazilian Real showing vulnerability
- Dollar strength contingent on inflation narrative
Strategic Playbook
Short-Term (Traders):
- Focus on 10:30 AM EST window for US PPI + Jobless Claims double-header
- Monitor financial sector response to inflation/growth divergence
- Watch for potential volatility in GBP crosses during UK data digestion
Long-Term (Investors):
- Consider defensive positioning given persistent inflation above targets
- Evaluate exposure to UK assets with significant growth forecast reduction
- Monitor emerging market exposure with Brazilian service sector contraction
Forward Outlook
Catalysts:
- US Retail Sales (February 14)
- Industrial Production data (February 14)
- Fed speakers' response to inflation data
- Potential impact of Ukraine-Russia ceasefire talks
Risk Radar:
- Inflation readings above consensus could accelerate rate expectations
- UK growth deterioration might trigger European contagion concerns
- Emerging market volatility amid global growth concerns