Release Explanation: The Producer Price Index (PPI) measures the rate of inflation (i.e., the rate of price changes) experienced by manufacturers when purchasing goods and services. This includes the rate of inflation at the factory gate. “When manufacturers pay more for goods and services, they are likely to pass the higher prices to consumers,” TheLFB-Forex.com Trade Team said.
TheLFB-Forex.com Trade Desk Thoughts: In March, the German PPI was released at -0.7%, lower than market’s expectations. The year-over-year read dropped to the lowest level since 2002, from +0.9% in February to -0.5% in March. The largest upward pressure came from energy products in the prior months, but now this trend seems to be reversing, dragging the whole index lower.
Forex Technical Reaction: The Euro bounced from the neutral pivot point (1.2955) during the news release, and fell 25 pips.