PPI Even Crazier Than CPI, But Bonds Are Less Bothered

If CPI is a 10 out of 10 on a scale of economic data that causes bond market volatility, PPI is never more than a 5.  It's a good thing too.  All it took was a 0.1% deviation from expectations for CPI to send bond yields 15+ bps higher on Tuesday.  Contrast that to today's PPI deviation of a whopping 0.4% (specifically, m/m core PPI came in at 0.5 versus a median forecast of 0.1).  If this had been CPI, 10yr yields would likely have jumped 30+ bps, but that's assuming anyone would believe the number. 

This level of deviation is all but unheard of on CPI.  On the other hand, PPI is historically much more volatile.