Analysis: Market expectations are overly focused on crude oil; US March PPI fell short of expectations across the board.

Investinglive analyst Adam Button stated that the US March overall and core PPI annual and monthly rates were all significantly lower than market expectations. Given that market forecasts primarily revolved around the anticipated surge in energy prices, the focus is on where the discrepancies lie. While energy prices did indeed rise sharply, the increase was less than expected: refined oil products surged (gasoline +15.7%, diesel +42.0%, etc.), but natural gas plummeted by 51.7%, partially offsetting the overall impact. The services sector unexpectedly remained flat (0.0% month-on-month), and this sector, accounting for approximately 68% of the total, was the main reason for the weaker-than-expected data. One driving factor was declining trade margins, with retailers absorbing some energy costs rather than passing them on. Transportation prices rose by 1.3%, but with only 5% of the total, it was insufficient to offset the shortfall. Food prices fell by 0.3%, also dragging down the overall data. In short, market expectations overemphasized crude oil, underestimating three factors: the plunge in natural gas prices, the compression of trade margins, and the slowdown in core services inflation. Energy transmission did exist, but its magnitude was narrow, and the pricing power of other parts of the economy weakened. (Jinshi)