Service costs decline for the first time this year, US July PPI cools more than expected! Traders increase bets on a 50 basis point rate cut in September

The U.S. Producer Price Index (PPI) for July rose less than expected, reflecting the first decline in service costs this year as inflation pressures continue to ease. Service costs fell by 0.2%, indicating a decrease in profit margins for machinery and automobile wholesalers. Meanwhile, commodity prices rose by 0.6%, marking the largest increase since February, driven mainly by higher food and gasoline prices. PPI data is released before the more closely watched Consumer Price Index (CPI), with the market generally expecting a slight increase in CPI to be announced on Wednesday. Traders are increasing their bets on a 50 basis point rate cut in September, with the probability exceeding 50%