Every trader knows the feeling. It’s 8:30 AM ET, the number flashes across the screen, and in a blink, the dollar spikes, stocks dive, and gold whipsaws. That number is CPI—arguably the single most important monthly report in the world.

The King of Inflation Reports

While PPI tells you what producers are paying, CPI (Consumer Price Index) tells you what consumers are paying. It tracks the change in prices for a basket of goods and services—everything from rent and groceries to healthcare and utilities. In other words, CPI is the report that shows how expensive life is getting for the average household.

Most traders obsess over Non-Farm Payrolls (NFP) or the Consumer Price Index (CPI). They’re the rockstars of the economic calendar—the ones that light up CNBC headlines and Twitter feeds. But lurking in their shadow is the Producer Price Index (PPI) and its sibling, Core PPI. They don’t trend on social media, but in trading desks and macro funds, they’re a big deal.

Why? Because PPI is where inflation begins. It tracks the prices producers receive for goods and services— the raw costs before they ever hit your grocery bill or utility statement. Think of it as the “upstream current” of inflation. If it’s running hot, downstream consumer prices usually follow.

Why Everything Seems Connected (Because It Is)

On the surface, markets look like a busy city at rush hour—equities streaking one way, currencies flashing another, commodities rumbling in their own lane. But zoom out and it’s more like a choreographed dance. The steps vary, the music changes tempo, yet the dancers stay in time. That synchrony is correlation—the tendency for assets to move together, either in the same direction (positive) or in opposite directions (negative).

Correlation isn’t a mystical force; it’s a practical consequence of shared drivers. Think of interest rates, the U.S. Dollar, liquidity, and risk appetite as the “weather systems” of global finance. They sweep across asset classes at once, nudging prices with a tailwind or knocking them back with a headwind. The better you understand those systems, the earlier you can spot the change in wind.