AMERICAS OIL: MNI: US JUL INDUSTRIAL PROD -0.1%; CAP UTIL 77.5%

• MNI: US JUN INDUSTRIAL PROD +0.3%; CAP UTIL 77.6%
• US MAY IP REV TO +0.0%; CAP UTIL REV 77.5%
• US JUN MFG OUTPUT +0.1%

SFIU5 96.15/96.10/96.05 put ladder paper paid 0 on 2K, 8K trades all day.

The June Producer Price Index report  was roundly softer than expected - and  certainly than feared given the context of rising tariffs -  despite some upward revisions to prior. While core goods prices did indeed advance, the rise was consistent with the increases seen over the last 6 months rather than a sudden surge.

• The main headline reading was flat PPI % M/M (0.01% unrounded), vs expectations of a 0.2% rise (though this was offset by an upward revision to May, to 0.30% from 0.13%). That left Y/Y PPI at the softest level (2.3%) since September 2024, and down from 2.7% in May. Ex-food and energy final demand inflation unexpectedly fell, by 0.04% M/M (+0.2% was expected), though again May's upward revision must be considered (0.35%, upward rev from 0.14%).
• The core ex-food/energy/trade services reading though was negative for the 2nd month in 3, with only a modest upward rev, coming in at -0.05% M/M (+0.2% expected), with May revised up only marginally (+0.14% from +0.05%). This core category is now deflating for the first time on a 3M annualized basis since June 2020, with the 6M rate slowing to 1.8%, softest since September 2020 - suggesting momentum is waning, not increasing.
• Final demand goods rose by 0.3% M/M - the biggest rise since February - driven by core (ex-food and energy) goods rising 0.3%, with final demand energy and food rising 0.6% and 0.2% respectively. There was some potential tariff-related price hikes here, with communication and related equipment prices rising 0.8% M/M.
• But the core goods reading remained within the 0.2-0.3% M/M range that has prevailed in every month of 2025 so far, so there is not yet clear evidence that tariffs are having an outsized effect in this category. Finished consumer goods ex-food and energy actually saw inflation dip slightly, to 0.2% M/M from 0.3% in the 2 prior months, though core durables remained elevated at 0.4% vs 0.1% nondurables.
• This offset a 0.1% decrease in final demand services, though this was largely for travel services - traveler accommodation services fell 4.1% M/M and as noted earlier, passenger airfares fell 2.7% (after falling 0.9% in May).
• Trade services was a drag on PPI in June (-0.04%), there was a strong upward revision to 1.12% from 0.44% for May that appears to account for most of the prior revision, and this is a category that is not just volatile, but largely imputed from trade margins as opposed to a market-based price.