US PPI (Sep MM) 1.3% vs. Exp. 0.5% (Prev. 0.5%)

A monthly PPI print more than double the consensus sits at the upper end of surprise, and the pattern on this kind of miss is that the first move runs through the front end and the dollar, since producer prices feed the pipeline debate for consumer inflation rather than standing alone. The usual sequence is that a hot PPI revises expectations for the accompanying core CPI components that draw on PPI inputs, so the question becomes whether the pass-through is in goods, services, or trade margins rather than the headline itself. The distinction worth drawing is between a broad-based rise and one concentrated in food and energy, which markets have historically tended to look through; the core ex-food, energy, trade measure is the filter that decides whether the re-pricing sticks. Prior form on upside PPI surprises is that the yield impact fades quickly if the consumer-side prints that follow come in soft, and persists when they confirm. The immediate follow-ons are the core detail, any upward revision to the prior month, and the positioning of the next CPI release in the calendar.