Producer Prices Jump 1.3% in September, Yet the 10-Year Yield Falls
September producer inflation came in at more than double expectations. Producer prices rose 1.3% month over month, the Labor Department said at 8:30 a.m. ET (3:30 p.m. in Istanbul). Economists expected 0.5%; it was the biggest monthly gain since March 2022.
The annual rate climbed to 6.3% from 5.6%, against a 5.3% forecast. Core producer prices, excluding food and energy, rose 0.7% on the month and 5% on the year. Forecasts were 0.3% and 4.4%; Wednesday's consumer inflation had already accelerated to 3.7%.
The bond market did not read the report as a rate story. The 10-year Treasury yield sits at 5.07-5.10%, 9-12 basis points below Wednesday's 5.19% close. Money fleeing tech is moving into bonds; Saxo says October hike odds topped 50% intraday Wednesday, then fell below 30% by the close.
Pressure on stocks persists. CoreWeave fell 15.5% Wednesday after Gartner warned that 80% of neocloud providers could lose independence by 2030. Nebius dropped 10% and Oracle 8.8%, while yields on CoreWeave bonds rose to 15%.
The selloff spread to Asia overnight. South Korea's Kospi fell 7.6% to 5,554, triggering a circuit breaker, and Japan's Nikkei lost 5.1%. SK Hynix fell 11.1% and Samsung Electronics 9.5%; foreigners sold about $2.7B of Seoul shares at 1,343 won per dollar.
