ECB cuts/PPI driven by higher chicken eggs/Claims jump

The ECB cut to 3%, by 25 bps as expected and Lagarde is speaking right now. She's still acknowledging sticky service inflation in part due to higher wages but believes policy is still restrictive. She said they "are not pre-commmitting to a particular rate path." The euro is flat and bond yields, are up only slightly and off their earlier morning highs of the day.

Headline PPI in November rose .4% m/o/m, twice the estimate but ex food and energy it was higher by .2% as forecasted. The y/o/y headline gain accelerated, up 3% vs 2.6% in the month before. The core rate was up by 3.4% y/o/y, unchanged with October. A spike in food prices accounted for the headline beat as they rose 3.1% m/o/m and up 5.1% y/o/y. There was a 55% rise in chicken eggs which accounted for 25% of the PPI increase. Also, according to the BLS, "Prices for fresh and dry vegetables, fresh fruits and melons, processed poultry, non-electronic cigarettes, and residential electric power also increased."

Core goods prices rose by .2% m/o/m for the 5th straight month and up by 2.2% y/o/y. Thus, persistent around this trend.