US producer prices rose 0.4% month-on-month, higher than the expected 0.2%, which gives no respite to the inflation narrative. The USD dollar continues on its merry way with the JPY up at 24-year lows again and US equity futures pointing to a weaker open. This PPI number suggests that an upside surprise on the CPI is possible tomorrow. USDZAR pushed above R18.20 after the release and will continue to watch the data from the US.  The reaction to the Rand was also telling as the Rand moved within touching distance of the R18.30 level. This gives us a little taste of what could happen tomorrow with the CPI number. The key number to watch is the headline number, and should it print above 8.1% we could be in for a rough Thursday afternoon.

Tonight we have the US FOMC minutes and although the market mostly knows what the minutes would contain, the markets will invariably go over the minutes with a fine-tooth comb in order to dissect any changes in stance from the Fed. Any indication that the Fed could be more hawkish than what they currently are could cause EM currencies to lose a bit of ground as rosk sentiment will start to waver.