US markets fell overnight as the Producer Price Index for November came in ahead of consensus, in the final puzzle piece for the Fed heading into the FOMC meeting next week. The Dow Jones fell 305 points (-0.90%) to close near lows. At best it was up 63 points, and at worst it was down 319 points. The NASDAQ slipped 0.70% and the S&P 500 fell 0.73%. In Europe, STOXX 600 +0.84%, FTSE +0.06%, DAX +0.74%, and France +0.046%. SPI Futures are down 35 points (-0.48%) this morning.

The US PPI print for November came in at 0.3% month on month ahead of consensus of 0.2%. This is the final piece of the puzzle in the Fed’s decision-making for the next FOMC meeting. The probability for a 75bp rate hike jumped a couple of per cent but a 50bp hike is still favoured. On a slightly better note, consumer sentiment in the US picked up overnight, buoyed by falling petrol prices. Bond yields were higher overnight, with the 10-year yield up 9.6bps and the 2-year yield up 3.2bps. The USD Index was up a touch and the Aussie Dollar rose 0.38% to 67.92c, closing in on 68c.

In commodities, base metals were mostly lower, aluminium, lead, and tin were all down over 1%. The oil price woes continued with West Texas Intermediate down 0.35%, rounding out the biggest losing week in months. Brent crude prices rose 0.47%. Gold was up 0.44%, despite a slightly stronger USD. Dalian iron ore futures jumped 3.34% as optimism around China improved with COVID curbs continuing to ease. BHP and RIO both finished higher in the US, but other resources stocks experienced a volatile session. Freeport was down 3.149%, Alcoa fell 4.65%, and Anglo-American dropped 3.32%.

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