User Name: Password:      Register - Lost password?
Search In...
 
 

Categories
  Topics
         A Live Learning/Help Forum
             VIDEOS - TradingClinic.com
                 Mov Avgs (6)
         Currency Futures
         Market Terminology
         Options
         Posting a Forum Chart
         Trade Execution
         Trade Management
         Trading Fundamentals
             Economic Indicators
             Flows/Central Banks
             Risk Aversion
         Trading Psychology
         Trading Technicals
             Charting
         Trading Techniques

  VIDEOS: FOREX TRADING
         Module 1: The Basics of Forex Trading
         Module 2: The Logistics of Forex Trading
         Module 3: The Logistics of Forex Trading Part 2
         Module 4: What Moves the Forex Market
         Module 5: Trading the US Dollar
         Module 6: Trading the Euro
         Module 7: Trading the Japanese Yen

  VIDEOS: Trading Basics
         Module 1: Technical Analysis Basics
         Module 2: Chart Patterns
         Module 3: Technical Indicators
         Module 4: Candlestick Chart Formations
         Module 5: The Psychology of Trading
         Module 6: Money Management
         Module 7: Position Sizing
         Module 8: Intro to Fundamental Analysis
         Module 9: Economic Releases that Move the Markets
         Module 9a: Pulling It All Together


  Help/Learning Forum Topics
 
 

Found In....
 
Category Name: VIDEOS: Trading Basics
 
 
 
Lesson 6: How to Interpret the Producer Price Index (PPI)
By: Informedtrades.com
How to Interpret the Producer Price Index (PPI)



In our last lesson we learned about the ISM Manufacturing Index and how this indicator gives us insight into an important component of the economy, as well as early indications of employment growth and price pressures. The indicators which we have focused on thus far have been primarily focused on trying to gauge the growth in the economy, so today we are going to turn our attention to indicators which are designed primarily to gauge the level of price stability in the economy, starting with the Producer Price Index.

Reported at 8:30am in the second or third week of the month the Producer Price Index (PPI) is a measure of the increase or decrease in the selling price received by US producers for their output. Very simply, what this indicator does is measures any price changes from the company side of the equation.

While the headline number is a reflection of the change in prices at the producer level over last month expressed in percentage terms, like many of the other indicators we are studying, the PPI includes many sub indexes which make up the headline number. This increases the importance of the release as it allows market participants to get a look at what is happening not only with overall producer prices, but also producer prices by Industry. There are currently over 10,000 sub indexes used to compile and released with the report, each of which is given a weighting depending on its size and importance to the economy. The important thing to realize here is that included in the release is price data on pretty much every product type and industry that makes up the economy.

Secondly the price of goods is tracked at different levels of production, the three categories of which are crude, intermediate, and finished goods. Although numbers for all three are released with the report, when people refer to PPI they are normally referring to the Finished goods PPI number, as this is most closely representative of the price which will be paid by the end consumer. It is this number which is ultimately the determinant of inflationary or non inflationary pressures in the economy.

Lastly, the prices for food and energy have much greater short term volatility than other components of the index, so many market participants and the Fed will often focus on the “core” number which is the PPI minus food and energy.

While the PPI provides much insight into what is happening with prices, what ultimately determines the inflationary pressures the economy is experiencing is how much the consumer is paying for goods. The prices paid by producers, it is logical to think ,will be passed along to the consumer so the real market moving element of the Producer Price Index is its predictive power of increases in prices paid by the consumer as represented by the Consumer Price Index (CPI). This will be the topic of our next lesson.

 
 

 



Actionable trading levels delivered LIVE to YOUR charts

GVI Trading. Potential Price Risk Scale
AA: Major, A: High, B: Medium

Mon 27 May 2019
AAGB/US- Holiday
Tue 28 May 2019
A 14:00 US- Consumer Confidence
C 13:00 US- Case-Shiller
Wed 29 May 2019
A 08:55 DE- Employment
AA 18:00 US- BOC Decision
A 18:30 US- EIA Crude
Thu 30 Mar 2019
AAEZ/CH- Holiday
A 12:30 US- Weekly Jobless
Fri 31 Mar 2019
AA 10:00 EZ- Flash HICP
A 12:30 US- Personal Income, Spending, Deflator
AA 14:00 US- Final Univ of Michigan


Global-View Affiliate Program

We are starting an affiliate program to market some of our products.

Send me an email if you would be interested or if you know someone who would like to be an affiliate. Generous commissions payout for those accepted.

Put the word "affiliate" in the email subject line.

Contact us

Start trading with forex broker Markets Cube




pic

Retail Forex Brokerage Changing!

Are you looking for your first broker or do you need of a new one? There are more critical things to consider than you might have thought.

We were trading long before there were online brokers. Global-View has been directly involved with the industry since its infancy. We've seen everything and are up-to-data with recent regulatory changes.

Our Best Brokers listing section includes:Forex Broker Reviews, Forex Broker Directory, Forex Broker Comparisons and advice on How to Choose a Forex Broker

If would like guidance, advice, or have any concerns at all ASK US. We are here to help you.

SEE Our Best Brokers List

Currency Trading Tools

  • Live rates, currency news, fx charts. 

  • Research reports and currency forecasts.

  • Foreign Exchange database and history.

  • Weekly economic calendar.

Directory of  Forex trading tools

 
Terms of Use    Disclaimer    Privacy Policy    Contact    Site Map


Forex Forum
Forex Trading Forum
Forex Forum + forex rates
Forex Forum Archives
Forex Forum RSS
Free Registration

Trading Forums
Currency Forum Guide
Forum Directory
Political Forum
Forex Brokers
Compare Forex Brokers
Forex Broker News
Forex Broker Hotline

Forex Trading Tools
Currency Trading Tools
Forex Database
FX Chart Points
Risk/Carry Trade Chart Points
Economic Calendar
Quicklinks to Economic Data
Currency Futures Swaps
Fibonacci Calculator
Currency Futures Calculator

Forex Education
Forex Learning Center
FX Trading Basics Course
Forex Trading Course
Forex Trading Handbook

Forex Analysis
Forex Forecasts
Interest Rate Forecasts
Central Bank Forecasts

FX Charts and Quotes
Live FX Rates
Live Global Market Quotes
Live Forex Charts
US Dollar Index Chart
Global Chart Gallery
Daily Market Tracker
Forex News
Forex Blog
Forex News
Forex Blog Archives
Forex News RSS
Forex Services
The Amazing Trader
Forex Opportunities
Forex Affiliates
Forex CopyTrading
GVI Forex