Back-to-Back Soft US Inflation Prints

• Bond yields and the US dollar softened for a second consecutive session, with June producer price data coming in well beneath expectations and reinforcing the disinflationary tone from the prior day’s CPI print.
• Headline PPI came in at -0.3% month-on-month and 5.5% year-on-year, a meaningful undershoot of the 0.0% and 6.2% forecasts, and down from 6.0% year-on-year in May.
• The core read was similarly subdued, with prices excluding food, energy and trade services rising just 0.1% over the month — the softest outcome in six months after a 0.8% gain in May.
• China’s Q2 GDP came in at 4.3% year-on-year, missing consensus and falling below the official target range. June activity was mixed, with industrial production and retail sales firm but fixed asset investment again disappointing.
• Domestically, Melbourne Institute inflation expectations for July are on the radar today, while US retail sales for June are the key offshore release to watch.