March PPI year-over-year came in at 4%, below the expected 4.6%; the month-over-month rate was 0.5%, below the expected 1.2%; core PPI year-over-year was 3.8%, below the expected 4.2%. Broadly below expectations.
Transmission logic:
PPI below expectations → Inflation pressure less than concern → Rate cut expectations recover → US dollar weakens → Bitcoin rebounds
Market reaction
· Rate cut expectations recover: After the data was released, market rate-cut bets warmed up (February’s PPI beat expectations previously pushed rate cut expectations back to mid-2027)
· US dollar weakens: The US dollar index fell by about 0.35% intraday, nearing 98.00
· Bitcoin rebounds: Immediate market reaction, with a single-day gain of about 4.87%; Ethereum rose by about 8.59%
Two major risks
1. Oil price pressure has not yet transmitted: Higher oil price costs are not fully reflected in March PPI; delayed transmission may appear in the coming months, when the pressure will resurface.
2. Risk appetite is fleeting: Some believe, “The root of inflation hasn’t been removed; this data fluctuation is just a celebration... the real test is ahead—don’t get tricked by a one- or two-day rebound into taking the bag.”
Summary: A broad miss in PPI versus expectations triggers a short-term rebound, and the logic matches the previously outlined scenario of “below expectations → relief rebound.” But the risk of delayed oil price transmission remains, and the sustainability of the rebound is in question.
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