European PPI (Jul YY) 5.8% (Prev. 4.6%)

The read-through that has mattered historically is not the PPI print itself but its distance from consumer inflation and the wage round: when pipeline pressure runs well ahead of CPI, the question for the central bank is whether firms absorb it in margins or pass it on, and that margin-versus-pass-through distinction is what separates transitory spikes from second-round episodes. Selling prices expectations surveys and the input and output price components of the PMIs are the usual tells for which case is unfolding. Prints of this kind have tended to steepen the front end's sensitivity to the next consumer inflation release rather than to reprice the path outright, since producer prices are treated as a leading indicator rather than a target variable. Worth noting whether the month-on-month rate corroborates the annual figure or whether the move is base effects, which typically determines how much of it survives into policy deliberations.