Current Prices

The Philly Fed prices paid index jumped in April. 59% of firms reported paying more for inputs, up from 44% in March.

The April 2018 Philadelphia Fed Manufacturing Business Outlook Survey shows continued expansion but input prices are rising far faster than prices received for manufactured goods.​

Current and FutureGeneral Activity Indexes

I have not paid much attention to the regional Fed reports because they have tracked actual manufacturing output poorly for quite some time.

However, the prices paid and prices received indexes make perfect sense in light of Trump's foolish tariffs.

Price increases for purchased inputs were reported by 59 percent of the manufacturers this month, up notably from 44 percent in March. The prices paid diffusion index increased 14 points to its highest reading since March 2011. The current prices received index, reflecting the manufacturers’ own prices, increased 9 points to a reading of 29.8, its highest reading since May 2008.

Diffusion Index Comments

Once again diffusion indexes have serious problems. They measure direction, not amplitude.

For example, if one firm reports prices paid rises 25% and another reports prices paid drops 1%, there is no net change in the index for those two firms.

We have an idea that prices are rising, but there is no indication by how much.

Beige Book

There is nothing remotely startling by this report in light of the Beige Book report yesterday.

The Beige Book is a compilation of all the Fed regional reports, including the Philly Fed.

Yesterday, I commented Fed's Beige Book Notes "Dramatic" Increases in Prices Due to Tariffs.

Bond Market Reaction

Even though the Philly Fed report should have been completely expected, bond yields jumped as if the report provided new, significant news.

Bond

The inflation scare is in full swing, but the long end of the curve is still quite contained.

I side with Lacy Hunt at Hoisington Management regarding the attractiveness of the long end of the curve.

This material is based upon information that Sitka Pacific Capital Management considers reliable and endeavors to keep current, Sitka Pacific Capital Management does not assure that this material is accurate, current or complete, and it should not be relied upon as such.

Feed news

Latest Forex Analysis


Latest Forex Analysis

Editors’ Picks

EUR/USD remains bid and approaches 1.1650 after US data

The persevering selling pressure in the greenback helps EUR/USD advancing to the area of daily highs near 1.1650 on Friday. The data from the US showed on Friday that the economic activity in the private sector continued to expand at a robust pace in early October.

EUR/USD News

GBP/USD treads water near 1.3800 after mixed UK data

GBP/USD came under bearish pressure in the early European session after the data from the UK showed an unexpected contraction in September Retail Sales. However, the British pound managed to pare its losses with the Markit PMI figures surpassing analysts' estimates.

GBP/USD News

GBP/USD treads water near 1.3800 after mixed UK data

GBP/USD came under bearish pressure in the early European session after the data from the UK showed an unexpected contraction in September Retail Sales. However, the British pound managed to pare its losses with the Markit PMI figures surpassing analysts' estimates.

GBP/USD News

Crypto bulls unfazed by flash crash

BTC closed more than 5% lower on the Thursday session, but buyers have stepped in to hold the Tenkan-Sen as support. ETH action shows that the recent rejection has caused some indecision. XRP does not have far to move to initiate a massive bullish breakout.

Read more

Apple talks over battery supplies for EV stall-Reuters

Apple (AAPL) is on a steady move higher ahead of results next week. We have had solid earnings from big names already such as Tesla (TSLA) and Netflix (NFLX), but Apple is the biggest one of all and will be the highlight of the earnings season for many.

Read more

Majors

Cryptocurrencies

Signatures