Producer inflation of the main economy in the European Union negatively surprised the markets. Its value differs significantly from the consensus. This indicator looks much better in Canada. In Scandinavia, Swedish policymakers tried to surprise the market by raising interest rates above expectations.

PPI in Germany

Behind our western border, producer inflation broke the record from a month ago (37.2%). Thus, it established new heights. Its current value is as much as 45.8%. This reading differs significantly from the market expectations of 37.5%. Never in history has the German economy dealt with such values ​​in the case of the index in question. Moreover, the jump by 8.6 percentage points from the reading from the previous month is also a record difference. It is worth noting that producer inflation is not an index that significantly influences the exchange rate values. Hence the lack of a greater response to EUR / USD after its publication. The world’s main currency pair remains above parity from yesterday evening to Tuesday 10:00. Let me add that the PPI has a delayed impact on consumer inflation. Here we come to a not very optimistic conclusion that suggests worse German data CPI in the following months.

Better in Canada

Producer inflation in the Maple Leaf Country is heading in a completely different direction. Here, from March 2022, we are in a downward trend. Yesterday’s release was at 10.6%. Thus, we have descended to the lowest levels since April 2021. Good data from the Canadian index slightly affected the chart USD / CAD . After the release of producer inflation in Canada, yesterday’s depreciation of the Canadian dollar rebounded from 1.334 CAD. To date, it has appreciated by less than a cent against the US currency. We have a reading this afternoon CPI from Canada, which could trigger more exchange rate movement on USD / CAD than yesterday’s producer prices data.

Sweden surprises, but not the markets

The Bank of Sweden raised interest rates above expectations. Their current value is 1.75%. This change was significant as the decision-makers from Stockholm opted for a 100 bp hike. It would seem that such a significant move will affect the exchange rate of the Swedish krona in relation to euro , the American dollar or the zloty. However, this did not happen. After the temporary exchange rate turmoil related to the announcement of the Riksbank’s decision, on Tuesday before 10:30 on the EUR / KNOT and USD / SEK we are above the levels observed in the morning. This means that moments after the data release, the Swedish krona slightly loses to the three aforementioned currencies.

Today in the macroeconomic data calendar it is worth paying attention to:

14:30 – Canada – consumer inflation CPI

19:00 – zone euro – public speech by the President of the ECB (Christine Lagarde).