“August CPI turned negative year-on-year, mainly due to a high base last year and weaker-than-seasonal food price growth. By category, the decline was mainly due to lower food prices. As policies to boost domestic demand and consumption continued to take effect, core CPI rose for the fourth consecutive month. In August, core CPI excluding food and energy increased by 0.9% year-on-year, 0.1 percentage points higher than last month.”
Producer prices fell at a slower pace, signaling a potential turnaround in demand. Producer prices fell 2.9% YoY, the rate of decline slowing from July’s 3.6% drop.
Price shifts lifted demand for risk assets, but caution set in as traders awaited US inflation data, leaving US stock futures mixed.
US Stock Futures Mixed Ahead of US CPI Report
US stock futures eyed a three-day winning streak in early trading on Wednesday, September 10, after the S&P 500 closed at record a high overnight. The Nasdaq 100 E-mini rose 24 points, the S&P 500 E-mini gained 12 points, while the Dow Jones E-mini fell 64 points.
Easing pressure on China’s producer prices and rising expectations of aggressive Fed rate cuts supported demand for risk assets.
According to the CME FedWatch Tool, the chances of a September Fed rate cut stand at 100% (September 2: 92.7%). Furthermore, the probability of a 50-basis-point rate cut in September rose from 0% to 6.3%. A weaker-than-expected US Jobs Report and revisions to 2024 nonfarm payrolls influenced sentiment toward the Fed rate path.