Wholesalers Pay Much More

Consumers paid 0.6% more on May than April, but wholesalers paid more, much more. The producer price index (PPI), the index which reflects the change in wholesale prices, went up 1.4%. More than double the CPI. This is a very bad sign for the American economy, signaling high inflation and rising prices.

Contrary to the PPI, oil prices went down yesterday to below $134. Hopefully they will stay there and keep going down. Those outrageous oil prices make everything more expensive, and soon they will make loans and credit cards more expensive with higher interest rates.

I also started testing a new forex trading system called Forex Funnel. It has a very special trading strategy. I may write a review for it on a Sunday.

Yours,
Nadav

nadavs

Slick Excuses

It's excuses time at Wall Street. Yesterday oil nearly hit $140 per barrel, but then retreated. No one knew why that happened, so people invented a new excuse: options expiration. Options may drag oil to a round number, like $140, but there is also some economic reason, and oil went down to about $135.

Today's data includes the PPI, an important gauge of inflation. PPI is more volatile than CPI, but eventually wholesalers affect retailers, which eventually affect consumers. There is no way to escape it. Rising oil and food prices affect the entire economy, which in turn affects the forex market.

EUR/USD was unstable yesterday, rising and falling with no clear patterns. Forex Tracer still managed to pull a small profit out of that, but not as big as usual.

Have a great day,
Nadav

nadavs