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