Cold PPI
Tomorrow’s PPI (Jan ‘26) consensus: 0.2-0.3% MoM headline.
But we could see cooler—flat/negative—on services fade, pre-tariff ease.
Relief rally incoming?
Why Cold?
Dec’s heat was mostly services pass-through from import tariffs— expect reversal (Reuters noted tariff lag, but Jan’s early, pre-full bite).
Plus, goods deflationary (supply chains easing), wages cooling (post-shutdown noise).
Recent CPI was tame at 2.4% YoY—PPI often lags but follows.
Odds tilt 25-30% for flat/negative MoM—call it “tariff bluff fade.”
Upside Math
Historical surprises: Cold (<0% or -0.1%)
ES +15-35 pts fast (to 6950-6970), 40-60 if dealers flip.
Spike 8:30-9:30, hold day if clean.
Downside Hedge
Hot (+0.5%+) 25-35% chance—flush 30-60 pts to 6880 (based on current levels).
Play
Long pre 8:30.
Confidence: 65-80% mild upside for cold PPI.