Hot PPI and Hawkish Fed Speak Hit Stocks, Gives USD a Boost

A hotter than expected PPI figure combined with hawkish statements from Fed members and a fall in jobless claims saw risk assets take a hit in Thursdays US session.

Headline PPI came in at an increase of 0.7% month on month (0.4% expected) while a drop in unemployment claims showed how resilient the US economy is despite the Feds recent tightening cycle, dampening expectations the Fed will pivot anytime soon.

Adding to the mix were know Fed hawks Mester and Bullard advocating for higher rates for longer to fight inflation and not ruling out the Fed reverting to oversized 50bp hikes if needed.

Unsurprisingly as rate markets repriced near term predictions of the Feds rate trajectory to the hawkish side, stocks took a hit, led down by the more risk and rate sensitive Nasdaq.

With Tesla (TSLA.NAS) being the big loser, tumbling initially on the news of a recall then on the broader market.

..And the US dollar rallied, with AUDUSD briefly breaking through the 0.6860 major support level.

In Crypto, Bitcoin continued it’s rally early in the session, touching on the 25k USD per token (its highest level since June 2022) major resistance level before being forcefully rejected.

Todays economic calendar takes a breather after an exciting week, with a handful of mid level figures out of Europe and the UK which will likely have little impact on markets..