Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

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March 15, 2024

Strong PPI print stokes fears of persistent inflation

Macro

US PPI data yesterday was too hot for interest rate markets to handle. Benchmark 10-year Treasuries declined, sending their yield higher, and the dollar strengthened. These actions tightened liquidity, and risk assets declined. Liquidity-sensitive Bitcoin has fallen by more than 10% from its recent all-time highs.

PPI is a volatile data point, and one month’s reading cannot be reliable. However, this print does not make good reading for equity market bulls and weakens the idea of early rate cuts.

Inflationary concerns were further heightened yesterday by the continued strengthening of crude oil prices. Brent is now trading above $85, its highest level since November last year.

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