After equities, commodities, and the high-yielding currencies came under selling pressure yesterday, an upside surprise with today's Producer Price Index turned the market's right around. At 0830 EST this morning PPI printed up 0.3% month-over-month putting to rest deflation fears for at least today's trading... In case you might be skeptical or unconvinced how critical inflation/deflation is right now to the markets all you need to do is pull up a chart for the EUR/USD, EUR/JPY, GBP/USD, GBP/JPY, spot crude (cl_cont), and the S&P 500 futures (es_cont) and you can clearly see every single one of those inflation-sensitive, higher-risk, higher-yielding markets made their turn upwards within minutes of the PPI data hitting the market. Not only did they make their turn after market participants had a few minutes to digest the data, but they never looked back until they all exhausted themselves at the 1530 EST time frame. It's no coincidence those markets made their bottom for the day, turned back up and rallied within minutes after the PPI data hit the news wires because each and every one of those markets need price inflation and rising price pressures in order to keep moving higher. And within 30-minutes of the PPI data release the US dollar Index topped put and did nothing but fall, along with the Japanese yen
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