Market commentary

An often overlooked inflation metric is the Import Price Index, which contains data on changes in the prices of goods and services imported into the U.S. Today this index was reported to have increased 2.2% in April, following a 2.6% increase in March. I am sure you have already guessed the main drivers of the increase in the index are higher oil and food prices. Fuel import prices have increase 37% year over year while food prices have increased 20% year over year. Excluding fuel, import prices rose 4.3%. Later this week we will see inflation data as measured by the Producer and Consumer Price indexes.

Other items of note this morning include the fact the Chinese yuan set an all-time high against the U.S. dollar, silver and oil prices are rebounding after last week’s shellacking, with oil back over $100/bbl, and the U.S. Treasury is bringing $32 billion of 3 year notes to auction later today.