5.2Inflation
- ·What CPI and PPI measure
- ·How inflation data links to policy expectations
- ·How those expectations transmit to markets
CPI — Consumer Price Index.
PPI — Producer Price Index.
Inflation data can influence expectations for central-bank policy. Those expectations can influence bond yields, currencies and risk assets.
Markets trade the expectation, not the number.
An inflation print above expectations may shift rate expectations, which can then move yields, the dollar and dollar-priced assets such as Gold.
Examples use historical or illustrative data only. They are not live market signals.
Find the next scheduled CPI release for your instrument's base currency and note the expectation.
CPI measures:
Inflation data influences markets primarily through:
- 01CPI and PPI measure different stages of price pressure.
- 02Inflation data shifts policy expectations.
- 03Expectations move yields, currencies and risk assets.
Educational content only. Nothing here is financial advice or a recommendation to trade. Trading involves risk of loss, results vary between individuals, and past performance does not indicate future results. Only capital you can afford to lose should be exposed to market risk.