CHART OF THE DAY: CPI-PPI Divergence

06/22/22 08:20AM EDT

Below is a chart and excerpt from today's Early Look written by Director of Research Daryl Jones. 

At the moment, the difference between Eurozone CPI and PPI is -29.8. As the chart shows, this is like nothing we’ve seen in the last 25+ years. In fact, at the moment this divergence has a Z-score of -6.5, a reading this high is extremely rare.

Ultimately, CPI will likely narrow the gap with PPI and provide consternation for the ECB, whose policy makers have been relying on the other global central banks to do their monetary tightening dirty work.

CHART OF THE DAY: CPI-PPI Divergence  - cpipp1

© 2022 Hedgeye Risk Management, LLC. The information contained herein is the property of Hedgeye, which reserves all rights thereto. Redistribution of any part of this information is prohibited without the express written consent of Hedgeye. Hedgeye is not responsible for any errors in or omissions to this information, or for any consequences that may result from the use of this information.