Primer: US PPI due Thursday 10th September at 13:30BST/08:30EDT

Core PPI is expected to rise 0.3% M/M in August, accelerating from the prior 0.2%, while the Y/Y rate is seen rising to 4.6% from 4.2%. Headline PPI is expected to rise 0.4% M/M from 0% in July, with the Y/Y seen at 5.3% from 4.7%.

The PPI report is due Thursday, one day ahead of the more closely watched US CPI report on Friday. As the first major inflation release of the week, PPI could provide an early indication of underlying inflation pressures, while several components of the report will also be scrutinised for their implications for the Fed's preferred PCE inflation gauge. With markets finely balanced over the September Fed decision, the reaction could be notable.

This week's inflation reports, particularly CPI, will be key in shaping expectations for next week's Federal Reserve meeting. Money markets currently assign a 60% probability of a 25bps rate hike at next week's meeting, with 40% for an unchanged print. Ahead of the blackout period, Governor Waller said he would support holding rates steady in September if the August inflation data shows continued progress. Waller remains optimistic that inflation is heading lower and said he is finally seeing signs of disinflation, pointing to considerable improvement in three-month core inflation, although inflation remains significantly above the Fed's 2% target. However, he said he would consider a rate hike if the August inflation data comes in hot, adding that a small policy adjustment could help ensure progress resumes if the data shows a reversal.