Wholesale prices just posted their 2nd-biggest jump ever.
Warsh said nothing useful in Bangkok last night — deliberately — and somehow that was the most revealing thing that happened all week.
Listen to the same-day episode — Ep. 084
Wholesale prices just posted their 2nd-biggest jump ever.
Warsh said nothing useful in Bangkok last night — deliberately — and somehow that was the most revealing thing that happened all week.
📊 Today's Numbers
Headline PPI (MoM) ▲ +1.3%: second-largest monthly jump ever recorded
Annual PPI ▲ +6.3%: beat forecast of +5.4% by nearly a full point
WTI Crude ▲ $97.55/bbl: highest since September, Hormuz fears baked in
Brent Crude ▲ $105.92/bbl: up ~73% year-on-year
10-Year Treasury Yield ▼ ~5.10%: market pricing a crack before a cure
Philadelphia SOX Index ▼ >10% from peak: chip stocks in correction territory
🏦 MACROECONOMIC
Photo: Rafael Minguet Delgado
Wholesale Prices Just Blew Through Every Forecast
One day after CPI came in hot, PPI came in hotter. September wholesale prices jumped 1.3% in a single month against a 0.5% forecast, and markets did something strange: they bought bonds anyway.
Headline PPI +1.3% MoM vs. +0.5% forecast: the second-largest monthly rise in the index's history, driven by energy costs cascading into transport and airfare
Annual PPI +6.3% vs. +5.4% expected: core PPI also broadened, up 5.0% annually against a 4.4% forecast — this isn't just an energy story anymore
10-year yield fell to ~5.10%: the market's read is that the economy may break before inflation does, which limits the Fed's room to keep hiking
💬 Two consecutive inflation overshots, and bond yields dropped. The bond market is essentially betting the Fed can't tighten its way out of this without breaking something first.
🛢️ COMMODITIES
Photo: Mark Stebnicki
Iran Confirmed It Sank a Ship. Oil Is Still Under $100.
U.S. Central Command confirmed Wednesday that a container vessel in the Strait of Hormuz was hit by an Iranian projectile and sank. Separately, Houthi drones struck buildings at Saudi Aramco's headquarters. WTI closed just under $98.
WTI +2.59% to $97.55/bbl, intraday high $98.10: highest since September; roughly 20% of global daily oil supply transits the Strait of Hormuz
EIA inventory draw of -8.0 million barrels (week to Oct. 9) vs. a -0.3 million consensus: a massive supply surprise that amplified the geopolitical premium already in prices
Brent at $105.92/bbl, up ~73% year-on-year: sustained at this level, it feeds directly into the headline inflation numbers the Fed is already struggling with
Fuel prices at the pump and shipping costs on everything from food to electronics stay elevated as long as Hormuz remains contested. The IEA has warned diesel markets could stay constrained well into 2027.
📈 EQUITIES
Photo: Francesco Ungaro
The ECB Just Told Berlin It Can't Block This Deal
The European Central Bank cleared UniCredit to raise its Commerzbank stake above 30%, removing the last significant regulatory hurdle to what would be Europe's largest cross-border bank merger in more than a decade. Germany's government, still a major Commerzbank shareholder, has spent a year trying to stop this.
Crossing 30% triggers a mandatory tender offer under German securities law: UniCredit now faces a binary choice — bid for all remaining shares or retreat entirely
Commerzbank is Germany's second-largest listed bank: a completed acquisition hands UniCredit a dominant position in European corporate lending, with real consequences for SME financing costs in both countries
The ECB's signal matters beyond this deal: regulatory openness to pan-European consolidation accelerates a debate economists have argued is overdue for the eurozone to stay competitive with U.S. and Chinese financial institutions
💬 Italy's biggest bank just got Brussels' blessing to absorb Germany's second-biggest. Berlin can object politically. Legally, it's out of moves.
📰 Also Today
Australia shed 39,300 jobs in September against a +20,000 forecast, pushing the unemployment rate to a five-year high of 4.7% and collapsing RBA rate-hike odds to around 15% for the November 4 meeting — the Australian dollar fell sharply and held its lows even as broader dollar softness provided no support.
Fed Chair Warsh declined to pre-commit to any October decision at the IMF meetings in Bangkok, saying only that September's hike "removed a dose of accommodation" — with markets pricing roughly an 80% chance of a hold on October 27–28, the residual 20% hike probability is enough to keep dollar funding costs elevated for emerging market borrowers.
The Philadelphia Semiconductor Index entered correction territory, falling more than 10% from last week's peak after CoreWeave's credit-default risk hit an all-time high; Nvidia's Jensen Huang publicly defended the company at an industry event, trimming the intraday SOX loss from -4.4% before session end, but the correction is not yet resolved.
🎧 Listen to today's episode — The Open Bell
With Warsh still unreadable and October 27 eleven days out, I'd love for today's issue to reach anyone else who has a rate decision on the line right now.
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Not investment advice. For informational purposes only.