UBS On-Air: Market Moves UBS On-Air: Paul Donovan Daily Audio 'Pricing data shaping policy expectations'
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Sep 11, 2025 The latest U.S. producer price data revealed surprising trends, with significant price hikes in sectors like electronics and textiles. There's an interesting interplay between inflation and profit margins, particularly in clothing stores. The discussion also covers Mexico's new tariffs on imports from China and their potential impacts on the economy and job market. Additionally, insights into the European Central Bank’s decisions highlight the complexities of global supply chains and economic expectations.
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Divergent Price Moves Across Sectors
- US producer price data showed weak headline inflation but sharp sectoral shifts in August.
- Some goods (computers, electronic parts, tyres, textiles) rose steeply while margins expanded in clothing and furniture sectors.
Margins Rising Where Storytelling Works
- The data hints at rising profit margins in retailers like clothing and furniture wholesalers.
- Retailers can expand margins by framing price rises as driven by other causes, not pure profit-taking.
Headlines Trump Detail For Politics
- For consumer inflation, the details matter more than the headline when assessing policy impact.
- Politicians still focus on the headline number even though granular patterns drive real economic responses.